3. Never close credit cards with a balance. This is worse than merely closing an existing credit card account.“ When you do this, your available credit or credit limit on that account becomes zero, which appears that you have used the maximum limit on that card,” Ross says.
3 ways to enhance your credit
1. Get a co-signatory. According to Ross, young adults, in particular, will benefit from this approach. A parent or guardian can serve as co-signatory on a credit card account.“ You and your co-signatories share the same responsibility on the loan,” Ross says.“ Hence, the loan is also reflected on your co-signatory’ s credit reports, affecting your credit positively or negatively depending on how it is used.”
2. Open a secured credit card. This is especially beneficial to those who have little or no credit, Ross says.“ To choose a secured credit card, go for a dependable bank and do not fail to read the entire fine print,” Ross says.“ Some credit card issuers charge significantly high interest rates and exorbitant fees, hoping to victimize people with little or no credit.” Likewise, see to it that the card you choose submits reports to all three credit bureaus to establish your good credit reputation.
3. A gas credit card can be a great help. A gas credit card can show creditors that you can be trusted to regularly pay your debts promptly, Repak says.“ After each billing cycle, you need to pay off the balance completely; and remember that keeping a running balance is not necessary to build your credit,” he says. One good motivation for paying a balance fully is that the yearly percentage rate on gas credit cards often is likely to be high.