ECONOMICS
CREDIT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Closing out old credit cards
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Paying off your credit card bill
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Using a large portion of your credit limit
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Opening a new savings account
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Detailed explanation-1: -Paying your bills on time Is one of the most important steps in improving your credit score. Pay down your credit card balances to keep your overall credit use low. You can also phone your credit card company and ask for a credit increase, and this shouldn’t take more than an hour.
Detailed explanation-2: -You want to make sure your balance is low when the card issuer reports it to the credit bureaus, because that’s what is used in calculating your score. A simple way to do that is to pay down the balance before the billing cycle ends or to pay several times throughout the month to always keep your balance low.
Detailed explanation-3: -Making payments on time to your lenders and creditors is one of the biggest contributing factors to your credit scores-making up 35% of a FICO Score calculation.
Detailed explanation-4: -Paying off your credit card balances is beneficial to credit scores because it lowers your credit utilization ratio. Utilization, which is the amount of available credit you’re using, is the second most important factor in credit scores, right behind your payment history.
Detailed explanation-5: -Use a balance transfer credit card. Consolidate debt with a personal loan. Borrow money from family. Pay off high-interest debt first. Pay off the smallest balance first.