Want to be credit savvy? Great, go ahead, but don’t come off as credit hungry! What’s the difference between the two? Read on to find out!
In today’s world where the customer is king, credit is indeed a power that is worth leveraging. As customers interact more and more with credit products, they form their own understanding of credit. While this is great, some may tend to get a little carried away with credit if they don’t know the nitty-gritty.
While many individuals become credit smart with experience, some tend to stray into the credit hungry zone if not guided properly. Want to know where you stand? The scenarios below should help you!
“I Check My Credit Score Every Month”
If you do this, you can consider yourself credit savvy, because your Credit Score changes with time and activity, so staying updated with it makes total sense. Additionally, checking your credit report for errors regularly is surely a recommended practice.
Additional Reading: All About Your Credit Score
“I Apply For Credit Every Month”
If you relate to this, we’re sorry to say that you’re coming off as a credit hungry individual. Why? Well, because each time you apply for a Credit Card or Personal Loan or any other credit product for that matter, your lender will run a hard enquiry on your credit profile. Now, unlike the harmless soft enquiries, i.e., the ones you do on your own for FREE on our website, hard enquiries can affect your Credit Score if done too often. Want to get credit savvy about this? Consider spacing out your credit applications.
Additional Reading: How Does Bankruptcy Affect Your Credit Score?
“I Mix Up My Credit Portfolio With Different Credit Products”
Provided this is done in a well-spaced out manner, you are certainly credit-savvy. When lenders receive a credit application from you, they’re not looking at whether you’re currently managing your credit accounts but also how well you’re managing various types of credit. So, in the eyes of a lender, a person who has a good mix of secured loans, unsecured loans, and Credit Cards is sure to score more brownie points than someone who has multiple accounts but of a similar type.
“I Apply At 2-3 Different Portals So That At Least One Of Them Gets Approved”
Well, while the saying “don’t put all your eggs in one basket” is fit for many things in life including diversification of your credit account, it surely doesn’t suit this scenario. Why? It’s simple really. Let’s say you’re looking for a Credit Card and you decide to apply via 3 websites. The lender will receive 3 applications from you eventually, and this may really make you look credit hungry. Lenders don’t value desperation, so you can savvy this up next time around by just submitting one solid application.
Additional Reading: A Brief History Of Credit Scores
“I Scan My Credit Report To Get Useful Insights To Improve My Credit Score”
This obviously shows you have a great appetite for improving your credit history, but don’t worry, it doesn’t mean you’re credit hungry; it falls under the savvy category for sure. Why? Because your credit report contains detailed information about what’s working for you and what’s not, so why not use the insights to improve your Credit Score in the long run? It’s a super-smart move, plus it’s FREE!
“I Have A Decent Credit Limit, And I Use It To The Fullest Because Of Carpe Diem, Baby!”
Living for the present is certainly applicable when it comes to some aspects of your life. However, when it comes to your credit limit, lean on the side of caution. When credit is given to you, your lender trusts that you’ll use it responsibly and possess the ability to pay it back. If you decide to max out your Credit Card limit, not only will you face mighty Credit Card bills but you’ll also look super credit hungry. So, how do you clean up this habit? Simple, stay within 40% of your credit limit, and you’ll surely help your Credit Score because then you’ll look like a pro who knows how to respect credit.