In recent years, due to inflation problems in Taiwan and the new Qing'an housing loan, the number of people with dual mortgages has hit new highs. Mainly, the average housing loan is 5.917 million yuan and the credit is 1.061 million yuan. The overall national debt value has reached nearly 7 million.
The older generation often says not to owe others money, that is a very bad thing! Since private lending is too complex and everyone has different conditions, I won’t explain it further here.
In fact, if it is not a private loan, but a targeted loan from a government bank to purchase anti-inflation items, it really cannot be said to be a very bad thing!
After all, over time, the current cheaper price is used to purchase goods that will definitely be more expensive in the future, such as the purchase of real estate.
When talking about mortgages and credit, it is inevitable to mention the issue of credit score. After all, before the other party lends you money, they must evaluate whether you have the ability to repay. Otherwise, if you lend the money casually, you will not be able to recover the money later. For the borrower, A very hurtful thing.
There are many types of comprehensive credit scores. The most direct one is of course the United Credit Scorecard, which looks at whether you have debts with multiple banks, how stable your daily income is, and then there is the issue of credit card utilization that most people often ignore.
Here I would like to tell you how to slightly improve your credit score in the direction of credit cards. After all, debt and income are not the conditions that can be improved in the short term. Let us start with the surrounding small things to adjust, so as to help our credit score. Slowly improve, and when one day you really need to borrow money from the government bank, you are more likely to have low interest rates and high loan limits.
In a modern society with advanced technology, almost every adult will have one or two credit cards at hand. After all, it promotes consumption convenience and allows stores to have more channels to make money. There are also post-consumer feedback, and consumers can also have less The amount of feedback money; the taxes generated by these cash flows are a good way to promote social development.
You can think of your credit card as a kind of invisible asset. After all, it is the credit limit given to you by the bank, allowing you to consume first and pay later; however, the utilization rate of the credit card limit plays a key role in your credit score.
If you want to improve the joint credit that you will use when approving a loan someday in the future, then in terms of credit card limit utilization, it is recommended to maintain it at 10%, or a lower utilization rate.
For banks, "Those whose credit card limit utilization rate is lower than 10% have the lowest credit risk under this indicator, so they can get better credit scores."
Let us use a simple consumption formula to calculate what credit card utilization is. You should understand it more quickly.
For example, if you have a credit card with a limit of 100,000, and you use it very often and use 80,000 every month, or you max it out very often, then your credit card utilization rate is 80% ~100%. Because this is a regular overdraft of your future consumption amount.
For banks, this is not a good credit card user, because the credit card limit utilization rate is very high, which also means that the risk of repayment ability is very high. Although you have paid enough money every period, one day you accidentally One installment is owed, resulting in recurring interest, which in turn affects the overall credit score.
How to reduce credit card utilization rate can be mainly started from three directions:
1. Increase credit card limit
Just like the example above, if your limit is 100,000, but you usually spend 80,000, the credit card utilization rate is 80%. If you call the bank to help you adjust the limit to 200,000, then you usually spend 80,000, and the utilization rate at this time is 40% will immediately help you double the price.
10W / 8W = 80%
20W / 8W = 40%
However, if you want to increase your limit, you usually need to have a good credit and repayment record before you can be approved. Furthermore, if you get a new limit, you should avoid increasing your expenses to the new limit, otherwise it may be counterproductive.
2. Keep your old credit cards
Older credit cards extend your credit age, which has an impact on your credit score and can also help reduce credit limit utilization.
If you have an unused credit card on hand, it will still be included in the calculation of credit card limit utilization. For example, you happen to have a credit card worth 100,000 yuan and a credit card with a consumption limit of 60,000 yuan.
You only use the 100,000 credit card every day and spend 80,000 per month. The original utilization rate should be 80%, but because you have another credit card on hand that has not been consumed, your total limit now becomes 160,000. However, you The daily consumption is 80,000, which directly helps you reduce the utilization rate of 50%.
10W / 8W = 80%
(10W + 6W) / 8W = 50%
But if you call the bank to cut the card because you don't use it on a daily basis, there will be no such reduction in credit card utilization.
3. Apply for new credit cards from different banks
As explained above, having more credit cards will allow you to reduce your credit card utilization rate, so applying for more different credit cards is not a big disadvantage. After all, having more credit cards means that the amount you can use will also be relatively higher.
Especially in today's society, different credit cards from different banks have different rewards for using them.
Applying for more credit cards that are helpful to your consumption pattern will also be a small supplement to the subsequent rebates. After all, you still get a small amount of rebates every time you make a purchase, which is equivalent to a discount on the variables. This is called For "smart consumption".
However, it is not that you apply for a lot of credit cards in a short period of time to adjust the utilization rate. This will be counterproductive. After all, every time you apply for a credit card, your credit card will be noted. Applying repeatedly in a short period of time will instead It's a fatal injury.
When applying for a new credit card, it is best to use three months or even more than half a year for application planning. After all, the joint review notes are based on three months as a unit.
However, when you have multiple credit cards at hand, you should pay attention to whether there are any annual fees. Except for some special credit cards, usually the platinum cards of many banks now only need to apply for electronic statements and make purchases once a year. No annual fee.
But with multiple credit cards, there will always be times when you are forgetful, so don’t forget to set an alarm for those credit cards that are not used often, and remember to swipe the card to make purchases within the time!
In order to apply for a loan one day in the future, we try every means to improve our credit score, which is like a marathon battle. In addition to maintaining a low credit card limit utilization rate, we must also pay card fees on time.
Although the above method is a bit troublesome and not easy for ordinary people to implement, it is a quite effective strategy.
After all, it is worth celebrating if your credit score can be improved even a little bit. It will have a critical impact on lower interest rates and higher credit limits when applying for loans in the future.
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