How To Get A Better Credit Rating Using Credit Cards

If people frequent on using their precious credit cards then they have a better chance of improving their credit ratings. However, that is if they repay purchases and their interest rates on time. On time payment is advantageous. Payment delinquency is damaging.

Credit rating, as Investopedia puts it, is "An assessment of the credit worthiness of individuals and corporations. It is based upon the history of borrowing and repayment, as well as the availability of assets and extent of liabilities." Whenever someone applies for loans from banks and other lenders, his credit rating will be reviewed. This information can be taken from credit bureaus that in turn keep track of people's and companies' credit histories. A high credit rating will make people more eligible for loans for their investments, personal use, and even prospective employment.

Yes, a credit rating is based on a credit history and that credit history shows data of all the repayments people did. All their credit card transactions, loans- whether bank loans or short term cash loans- are all reflected on it. Their credit history will show what kind of borrower they are, the pattern of their loans or credits, pattern of their repayments, and so on. This will give credit bureaus an idea as to whether they are an eligible creditor and thus banks and lenders can decide whether to approve the loan or not. When their credit rating is high, it's good news. If it's low, then they need to get better with repaying their credit card debt.

Having a higher credit rating is very useful in times when people need to loan a bigger amount of cash or loan for a car, a house, or their very own business because lenders and banks tend to approve their loans rather quickly compared to those who have poor credit ratings. Those with poor credit ratings are sometimes denied or allowed for a loan but with higher interest rates. On the other hand, those with good credit rating will be rewarded with low interest rates on loans, better premiums on insurances and mortgages, better deals on mobile services, and even greater opportunities at their dream jobs.

Credit cards hold a plethora of advantages but they all boil down to credit rating. People should take hold of this opportunity to create a better reputation for themselves. They should purchase with their credit card wisely and repay it on time.