while you can use the card in the same manner you would use any credit card and establish credit by paying off your balance in a timely manner. After some time, perhaps as little as six months, the credit card issuer might be willing to refund your deposit and convert your account to an unsecured card. ; ; Maintain low balances: Large balances on your credit cards and other revolving lines of credit can have a significant, negative effect on your credit score. ; ; Don’t postpone payoffs: Your goal should be to pay off credit card debts, not keep continually transferring them to other low-interest or even to zero-interest cards. Opening additional accounts can harm your score. ; ; Reduce your overall debt: Consider using your credit cards less, and begin paying off your balances, starting with the accounts that charge the highest interest rates. ; ; Apply only for the accounts you need: It’s better for your credit score to have some credit cards and installment loans, but don’t randomly open new accounts in an attempt to increase your credit mix. ; ; Limit new accounts: Some people continually open new accounts in the belief that it will increase the credit available to them. This is especially true of new credit users. It looks better to manage a few accounts responsibly over a long period. Adding many new accounts looks reckless and decreases your average “account age,” possibly lowering your score. ; ; Don’t continually shop for rates: It’s fine to shop for the best interest rate but do it in a compressed time for a particular loan. FICO can tell whether you’re searching
160
Powered by FlippingBook