How to use zero interest credit card offers to increase your credit score is simple by just managing the debt properly. Understanding how your FICO score is figured is part of this management process. Once you understand how credit reporting agencies calculate your FICO report score, you can start using zero interest credit cards to increase your score
Understanding Your FICO Score
There are many different parts to your credit score that the credit card companies use to set your interest rate, credit limit and even your eligibility for rewards programs.
Making all of your payments on time is a well understood part. Everybody knows this is part of your credit score but there are other factors. If you have not been managing your debt properly, you can increase your credit score almost overnight.
High Balances Hurt Your FICO Report Score
A good example is the person that uses one credit card because it has the highest cash back associated with it. This is good except it the balance is above 30% of the credit limit and detrimental if the balance is above 50%. Therefore if your current credit card balance is over 30% of your credit limit, you can raise your credit report score by transfer debt from that card to a new card so that each are below the 30% limit.
How To Use Zero Interest Credit Card Offers To Improve Credit Score
Most people with good credit have more than one card. To increase your credit score it is essential that you use more than one card. If your limit is above 30% of the credit limit on one card, transfer the amount above that 30% to another card. Make sure that the balance on the new card is below the 30% needed for an increase in your credit score. This is hard for most to understand. Credit card companies do not care how much total credit you have just your balance to credit limit on any one specific card. If you do not understand why it is ok, just understand this is how they look at it and you must do it.
In the future look at the cash back you earn as compared to the transfer fee you are charged to transfer funds from your favorite card to the other cards. If it cost you more money to transfer than you receive from the cash back program, use the credit card with the lower balance and less cash back as compared to the credit limit.