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A good credit score is key to everything from renting an apartment to securing a loan.
According to a new survey from Capital One, 53% of Gen Zers believe that keeping a monthly credit card balance will improve their credit score. Not true.
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Klutch COO Rachel Ehrlich said: “One of the credit score calculations is availability, which is basically how much you spend against your credit card limit. The higher your availability, the higher your credit score. , more availability (the amount of money you can spend) and a better credit score.”
Andrew Lokenauth, founder of Fluent in Finance, shared additional steps to actually improve your credit score.
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Pay bills on time: This is the most important factor in determining your credit score. Pay all bills on time, including credit card bills, mortgage payments, and utility bills.
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Reduce Debt: A high level of debt can have a negative impact on your credit score. Pay off debt as much as possible and avoid new debt if possible.
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Use credit responsibly: Use your credit only when you need it and pay your bills on time. Avoid using up your credit card as it can have a negative impact on your credit score.
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Maintain a good credit history: The longer your credit history lasts, the higher your credit score. Keep your account open as long as possible and do not close your credit account unless absolutely necessary.
Ian Wright, managing director of businessfinancing.co.uk, has provided some more tips.
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Spend tracking: Tracking your spending can help you better manage your finances and improve your credit score as a result. Setting a budget and tracking your spending will help you identify areas where you can cut spending and free up additional funds to pay off your debt.
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Monitor account activity: Reviewing your credit report regularly can give you valuable insight into how different activities and behaviors affect your credit score. By monitoring account activity, you can also detect fraudulent activity and fraudulent accounts that can harm your credit score.
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This article originally appeared on GOBankingRates.com: More than half of Gen Z believe this myth about their credit score
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