iNF > Personal Finance > Protecting Your Credit Score with a Personal Credit Card

Protecting Your Credit Score with a Personal Credit Card

Posted on 2023-04-13 17:06:20 by iNF
Personal Finance Credit score personal credit card financial management
Protecting Your Credit Score with a Personal Credit Card

Your credit score is an important element of your financial profile. It can determine the interest rates you receive on loans, credit lines, and even your insurance premiums. So it’s crucial to pay attention to your credit score and make sure it stays high. One of the best ways to do this is by using a personal credit card.

What is a personal credit card?

A personal credit card is a card that is issued to you alone, and not to a company, trust, or other legal entity. You’re responsible for the payments and, if used correctly, it can help you increase your credit score. There are many different types of personal credit cards available, ranging from low-interest cards to rewards cards that offer miles or cash back.

How does a personal credit card help protect your credit score?

Using a personal credit card can help protect your credit score in several ways. First, it shows that you can manage credit responsibly by making on-time payments and keeping your balances low. Secondly, it adds to your credit history, which accounts for 15% of your FICO score. Finally, it can increase your available credit, which can lower your credit utilization ratio – a factor that accounts for 30% of your FICO score.

Using a personal credit card responsibly

Of course, to reap the benefits of a personal credit card, you need to use it responsibly. This means paying your bill on time and in full each month, keeping your balances low, and only charging what you can afford to pay off. It’s also a good idea to choose a card with a low interest rate and minimal fees.

Was this the best article you have ever read?



Report article