Credit & Debit Essay

490 WordsJan 14, 20132 Pages
Aurelio Esparza Economics (H) 17 November 2012 Mr. Stewart. Credit and debt Many people wonder if applying for a new credit card can it impact your credit score if you use the card. Not really, frequently applying for new credit can hurt your credit score, so make sure you really need that new card before you apply for it. If you don't pay at least the total minimum payment on your credit card bill, your credit card company may report it as a missed payment. This can bring down your credit score and make it more difficult to qualify for credit in the future. Check your statement for the minimum amount due, and always pay it on time to keep your account current. And remember, paying more than the minimum amount due is a great way to pay down your debt. Thirty percent of your credit is based on your debt-to-credit ratio if you have a high credit and you keep your balances low, your debt-to-credit ratio will also be low, so a higher credit limit can help you protect your good credit score. But this is only the case if you continue to keep your balances low. Your best strategy is to use your credit cards and pay off the bill in full each month so you keep your overall debt-to-credit limit low. You don't need to restrict yourself to just one card, but hold yourself back from getting credit cards too frequently. Having a large number of credit cards may negatively impact your credit score. When you try to buy a new car or a house they will always check your credit score. Guess what? If you have a bad credit score you will be denied to buy the car and/ or a house. How will they check? Well the organizations call the CREDIT BUREAU, they check your information and your information will be forwarded to the organization. If your credit score is low then you will not be granted to buy the new car you always wanted or that dream house of yours. So you might say, well what’s a

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