If you want a higher credit score, you should try to keep your debt as low as possible. If your debt is too high, even if your credit score has always been good, you will easily be rejected when applying for a credit card or loan.
Let’s analyze how to reduce credit card debt ratio from three aspects.
1: Cancel unnecessary credit cards and learn to pay installments
1. Cancel unnecessary credit cards
Having too many credit cards is not something to be proud of. , because many times, we may not use some cards with small amounts often, and sometimes forget to repay them. We can cancel some credit cards that are not often used. Here I would like to emphasize the difference between canceling a card and canceling an account:
Card cancellation: It is to cancel a single credit card under an individual’s name. If you apply for a credit card from the same bank next time, you will not be able to enjoy new customer benefits and discounts.
Account cancellation: It means canceling your entire account. That is, if you have multiple credit cards in your account, all cards will be canceled. If you apply for a credit card from the same bank next time, you can continue to enjoy new customer benefits and discounts.
Whether you are canceling your card or account, you can apply for cancellation at the counter or over the phone, but you need to go through a 45-day observation period to make sure that your card has no outstanding balances, balances, or negatives before it will be issued to you. eliminate.
2. Apply for installment for a single credit card with too high debt
If you have just applied for a cash installment of 300,000, then the credit card debt of this credit card should be 30 Ten thousand, after applying for installment, the 300,000 will be spread over 36 months to repay. As for the monthly bill, you only need to repay the principal fee, and the credit report will not show a debt of 300,000. When you apply for installment, your true debt is hidden. The more installments you have, the deeper it is hidden.
So, if you have too much debt on a single credit card, you can apply for installments in advance, and your credit report will not have that much debt. Of course, there are some pitfalls in the installment fee, so use it with caution.
3. Replace the existing multi-currency card with a single-currency card
If you do not go abroad often and do not use foreign currency for consumption, you can replace the multi-currency card with a single-currency card. Single currency, this will reduce the number of accounts and also reduce liabilities.
Two: Adjust the order of application
When many people are in urgent need of money, they will apply for a credit card and a loan from a lending institution at the same time, but it is inevitable that they will panic because of their anxiety.
We all know that the approval time for applying for a credit card is long, and the approval time of credit institutions is generally faster.
So, apply for a loan first and then consider a credit card!
If during the bank review process it is found that the credit card institution has inquired about your credit record, it will also increase your personal debt ratio . So generally when applying for a bank credit card, please do not apply for many loans at the same time.
Three: Repay in advance
Credit cards have billing dates. If you pay off your debt in advance one or two days before the billing date, the debt ratio will be reduced.
For example, if your bill is issued on the 6th of every month, then pay off the balance before the 4th. If you continue to spend money after the 8th, you only have four days. If you repeat this cycle every month, you can get a very low credit card debt ratio on your credit report.
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