I am going to list some simple rules to improve your credit line which I learned by reading some experts and then followed them in my life: If you already have credit lines open then don’t overuse them and always pay on time. If you can’t pay in full then at least pay minimum required on time always. Never utilize more than 30% of your credit limit on each card. If you do so it impacts negatively to your credit score. Do not apply for more than 2 credit cards in a year. Every hard credit check impacts negatively. Do not close older credit cards, even if it doesn’t give much benefit. Length of credit history matters. If you have bad credit or no credit don’t worry. It takes some time but easy to repair or improve your credit score. Open a secured card by depositing some money and use that for some period of time wisely (the steps 1–3 above) to improve your credit score in less than a year. Apply for Discover Credit card as they usually approve for credit low score as well and use it wisely (the steps 1–3 above) for improving or rebuilding credit score. Do not apply for retail store credit cards which are of no much use in building credit but hard hit for credit check may negatively impact.
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I agree up to a point. Debt used to acquire income producing assets is good debt. If what you are buying on credit does not produce income, that is bad debt if you carry a balance. Financing the purchase of a rental property is good debt if the rental income is paying off the loan. Using a credit card to buy groceries, a vacation, a restaurant meal, etc. is bad debt but only if you don't pay off the credit card statement balance in full each month. Most would consider the mortgage on a primary residence a liability (because the asset does not generate income), but necessary debt to provide a roof over your head. There is no magic number of loans or credit cards for a good credit score. What matters is your payment history and the length of your credit history and your % credit utilization. I see a lot of posts in this thread that claim there is a limit on the number of loans and credit cards you can have for a high credit score. I have 9 mortgages, and seven credit cards and two HELOCs that are treated as revolving credit lines. My credit score last month was 843 with a credit history of on-time payments for the past 30 years. My credit card utilization rate is under 10% right now only because I have some credit card balances at 0% APR. These balances will all be paid in full by the time the 0% promotional rate period expires. A couple of years ago, one bank I use offered a 0% interest, $0 cash advance fee for a 13-month cash advance. I used the cash advance to borrow $25000, then used the money to buy a few CDs at my credit union. The credit union paid me 2% interest ($500) over the following 12 months. I made minimum payments ($250) to the credit card balance then paid the balance in full when the CDs matured. I just viewed that experience as receiving a $500 cash gift from my bank for being a good customer. The point I am trying to make is credit can be your friend if used responsibily.
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