No credit credit cards are not new but can be helpful for people with low credit scores. If your credit score is low, you may be trying to find out how to raise your credit score. There are primarily 3 credit score organizations that keep track of these scores. It is essential to learn to raise your credit score because it affects so many areas of life.



First it's important to always pay your bills on time. About 35% of the credit score is based on payment history. What matters most is whether you pay the bills on time. Nothing will run your credit score into the ground faster than being late on payments. After all the credit score is a measure of your creditworthiness, which potential lenders rely on in setting your APR or deciding if you're even worth the risk.

Second you shouldn't over-utilize. Some 30% of the credit score is based on how much of your total credit is in use. A rule of thumb is to stay below 50%. For example, if you have $50,000 available to borrow, keep your balances below $25,000. You'll also steer clear of red flags with each of your creditors, who often decide to lower credit limits and even raise APRs if utilization gets too high. Lowering your limit also can initiate a vicious cycle since it causes the utilization rate to go even higher.

Third you should work to build up a credit history, diversify your debt, and don't apply for more credit than is prudent. The other 35% of the score is based on these factors, with each contributing 10-15%. Like most things in the world of finance, the credit system rewards seniority and longevity. If you've been a good customer with a credit card for 15 years, creditors will be willing to loan you more money at a lower APR than, say, a 21-year-old with no credit credit cards.

The kinds of debt you owe matter. Having all of it in revolving debt like credit cards isn't as good as having a mortgage and pay. Like investors, creditors like diversification and reward you if you spread your debt around. Finally, when you apply for credit it will create an inquiry on your history, which will lower the score a few points. These last two factors aren't as important as the others but they will impact your overall score.

Unless you plan to make all of your major purchases with cash, you need to follow these pieces of advice to keep your credit score high. You should borrow money only when you need it. Never borrow more money than you can easily repay, and your credit score will rise over time.