Maintaining Good Credit Scores in the Philippines

Effective Ways to Increase Your Credit Scores in the Philippines

A considerable part of the Filipino population is either unbanked or underbanked. This means many of our countrymen don’t have access to banking solutions, including loans. One reason it’s difficult for many Pinoys to get approved for loans because they don’t know how to increase credit scores in the Philippines.

Benefits of a Good Credit Score

Building a Good Credit Scores in the Philippines

There are numerous benefits to obtaining and maintaining your credit score as a Filipino. These advantages include:

  • Easier access to loans

The average Filipino will have difficulty obtaining financing from traditional venues like banks. That’s because not all Filipinos have been taught to build good credit scores in the Philippines, and almost everyone has a zero score. Banks approve applications based on risk. For them, a person with no credit score might have no experience managing loans or cannot afford to settle one.

  • Cheaper loans

Not only will banks and financial institutions approve you for loans with good credit, but they will also give you lower interest rates. This means more affordable monthly amortizations. This has a snowball effect on your credit score. With lower monthly payments, you can pay off your loan quickly and increase your credit score.

  • Exclusive perks

Banks have a way of rewarding individuals who maintain a good standing record. These perks include discounts at partner merchants and occasional freebies. You may even get an upgrade to your credit card!

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Now that you understand how beneficial it is to build your credit score in the Philippines, it’s time to find out what you should do to achieve that goal.

Ways of Building Good Credit Scores in the Philippines

How to Make Good Credit Scores in the Philippines

Below are a few tips to remember if you want to increase your credit scores in the Philippines.

Apply for Multiple Credit Cards

There are multiple benefits to having more than one credit card. The most obvious advantage is the higher credit limit when both cards’ lines are combined. Maintaining more than one card gives you access to more credit whenever needed. If managed right, you’ll never run out of usable credit. This can be your lifeline when you encounter emergencies in the future.

On the other hand, demonstrating the capability to maintain multiple cards and keep up with the monthly payments tells other financial institutions that you are eligible for additional credit. It could also increase your credit score. Aside from that, banks that issue credit cards submit their credit reports on you to the credit companies in the Philippines. This could help you quickly get approved for loans and revolving credit lines.

However, having multiple credit cards can be a dual-edged sword. It may be challenging to keep up with the monthly statements and plan your payments accordingly. However, there are ways to get around these hurdles, including:

  • Listing down monthly obligations on Notepad
  • Building an Excel file to tabulate monthly expenses, including credit card dues and due dates
  • Using an app to manage your costs and create alerts

Pay Double per Month When You Can and Exceed Your Minimum

Every month, the credit card company gives you a date on which you’ll settle your dues. It also gives you a minimum amount due as an option if you cannot afford to pay the total amount owed. Most people will settle for this scaled-down amortization to save money, but it is actually detrimental if you want to increase your credit score in the Philippines.

Sticking to the minimum amount due prolongs your debt with the credit card company and sends a wrong message to the issuer. Trying to keep your monthly payments low gives the impression that you are not prioritizing your credit payments. Worse, it could make them think you cannot afford to repay your used credit quickly.

If you can, allocate money each payroll period to pay your credit card bills. You get closer to paying off your used credit, which frees up some resources you could use in an emergency. It also shows the credit card companies that you’re a ‘serious’ payer who wants to increase your credit score in the Philippines.

Keep Yourself Within the Limits

Cashless payments are the norm these days, a fact highlighted well during the pandemic’s early quarantine periods. There’s a convenience to just swiping or tapping a plastic card to settle transactions. You need not fumble in your bag for cash and loose change. All it takes is for the cashier to take your card and run it through the reader to close the sale. It’s all done in a few minutes.

The downside to this is the fact that you could lose yourself using the card to make purchases. If you’re not the sort to check your balance through an app, you could max out your card without realizing it. In other words, you could end up with a debt you find difficult to settle favorably. Hence, it’s important to stick within your limits, not your credit card.

A good rule of thumb is to keep sixty to seventy percent of your credit card limit available at all times. 30% is manageable and within your financial capability to repay in a short time.

To the credit issuer, sticking to 30% shows that you are wise in managing your finances and that you keep to thresholds that you can afford to pay. This will keep your credit scores in the Philippines positive and could increase them in the future.

Never Borrow More Than What You Need

Filipinos have this habit of borrowing money plus a little extra if they can get away with it. For instance, they’d borrow PHP70,000 even if they only need PHP65,000 because they want to keep the extra PHP5,000. It’s like receiving free money, which you’ll have to repay starting from the first month.

Unfortunately, that extra PHP5,000 will figure into your total contract. It will raise expenses considerably, especially when expensive interest rates are involved. For instance, if the loan charges 10% interest per month, that PHP5,000 you included will mean an additional PHP500 on your monthly repayment.

It’s good if you can afford the monthly terms and still have some extra left. However, if you’re only breaking even, that additional PHP500 monthly could have been used for something more substantial. When you encounter an emergency and divert that PHP500, you could be in trouble with your debtor, which could also affect your credit rating in the Philippines.

Take Advantage of Loan Apps

Loan apps in the Philippines can help you build your credit score. These services let you borrow money with just your mobile device, Internet connection, and a valid ID. Borrowing amounts may vary, with some offering up to PHP5,000 for a start. They will assess you for eligibility, but credit score is not a factor for some apps. However, they do report to the credit bureaus.

Make sure to stick to your payment schedules or make advance payments whenever possible. You should stick only to the best loan apps in the Philippines – they are safe and fair regarding credit collection.

Conclusion

Thanks to the Internet and other related technologies, Filipinos now have a shot at building favorable credit scores in the Philippines. This is necessary since it will help them access much-needed credit when they try to start a business, for example. Of course, a good credit rating in the Philippines will need to be maintained. That’s simple – they just need to keep up with their payments and avoid borrowing when unnecessary.

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Money From Cryptocurrency in the Philippines Bitcoin

The Future of Making Money From Cryptocurrency in the Philippines

If there’s one word to describe Filipinos, it would be “innovative.” The growth of multi-level marketing and online selling in the country is a testament to that. Making money from cryptocurrency in the Philippines is just one more endeavor our countrymen would be more than willing to dive into to earn some extra cash.

How Do You Earn Money From Cryptocurrency in the Philippines?

Money From Cryptocurrency in the Philippines ways you can earn

There are two ways to make money from cryptocurrency in the Philippines. The first one is mining. Mining means lending your computing power to the peer-to-peer (P2P) network that manages the blockchain, the digital ledger containing all cryptocurrency transactions.

Miners strive to outdo each other at solving a mathematical riddle that’s part of the transaction verifying process. This method rewards you with a coin, or fractions of a coin, for every contribution you make to the blockchain.

The second earning method is through trading. You buy and sell cryptocurrency on the market and profit from the price differences between your purchase and your asset disposal.

Is Cryptocurrency Mining Still Lucrative?

Money From Cryptocurrency in the Philippines is a lucrative endeavor

Crypto mining in the early days was very lucrative. For instance, miners can receive 50 Bitcoins for every transaction they can successfully verify. By 2012, they only received 25 Bitcoins per block they contributed to the chain. The number goes down by half every four years. By 2020, the reward is now 6.25 coins, the current rate until 2024.

Bitcoin’s creators implemented this security feature to control the circulation of new coins in the network. Since 18 million out of 21 million Bitcoins have been mined, that reward will go down even further until it stabilizes at its lowest amount.

It’s worth noting that Ethereum, the second-largest cryptocurrency, has no supply cap. This is because its network actively uses ETH coins as payment to initiate smart contracts.

Another factor affecting cryptocurrency mining profits is the rising equipment costs. Early miners simply contributed their personal computers’ power to the blockchain. However, in 2013, specialized mining rigs appeared on the market. These are more powerful but expensive computers that can verify transactions faster than personal computers.

As a result, new miners’ startup costs became higher. The price hikes slashed profits considerably. Despite that, the mining community continues to transact millions of dollars daily. If you decide to mine, you can still grab a piece of that figurative pie.

What Investment Do You Need to Make to Mine?

Money From Cryptocurrency in the Philippines needed equipment

As mentioned earlier, you will need a computer with considerable hash power. This metric refers to how many blocks the unit can add to the blockchain within 24 hours. The rule of thumb: the higher the hash power, the more mathematical riddles your rig can verify and add to the blockchain. Thus, hash power is a significant factor in determining your earnings.

How much does a mining computer cost? Prepare to shell out about PHP100,000 or more for a specialized mining rig. The Antminer S19 Pro 110TH costs $5,755 on Amazon without a delivery fee. That’s a one-time investment of PHP322,280!

You must also consider other expenses like your power bill in your startup costs. The S19 Pro consumes 3.25 kilowatts per hour (kWh). This translates to PHP744.57 per day and PHP22,337.17 per month under the PHP9.5458/kWh rate in July.

How Much Can You Make When Mining for Cryptocurrency?

Money From Cryptocurrency in the Philippines possible cash revenue

Your mining earnings depend on your computer’s hash rate and the exchange rate. If your rig can solve 100 riddles a day, you have a potential income of 6250 coins daily in your account. If you immediately cash out those revenues and convert them to Philippine pesos, you’ll receive roughly PHP7.6 billion!

Of course, these figures are theoretical. There is stiff competition among miners. In the Bitcoin network alone, professional miners are responsible for 90% of the crypto mined each day. A more realistic estimate would be one hash per day, even with the most potent mining computer in the world.

How Risky is Trading in the Cryptocurrency Market?

Money From Cryptocurrency in the Philippines investment risk

Cryptocurrency trading is a volatile business. The market is at the mercy of rapidly shifting factors. If traders buy in high volumes, the coin’s price increases, and you earn profits from your initial investment. On the other hand, the natural market response is a price drop if they sell in bulk. In cryptocurrency, this price movement is predominantly influenced by speculation and can be manipulated by people like Elon Musk.

However, the fact remains that when the market moves, the price changes tend to be very significant. Take Bitcoin, for example. In March 2020, when the world declared the first lockdowns, its price was $5,000. The halt in trading caused by the quarantines and the ensuing drop in the value of most investments influenced most investors to store their money in gold and cryptocurrency. By December 2020, Bitcoin’s value had risen 600% to $30,000.

However, this volatility goes both ways. In May 2021, China declared restrictions on crypto mining within its jurisdiction. The price immediately plunged from $65,000 in April to below $30,000 in response.

How Much Do You Need to Trade Crypto?

Money From Cryptocurrency in the Philippines how much is the initial investment

No standard minimum deposit exists for those wanting to start cryptocurrency trading in the Philippines. However, each platform sets its thresholds for beginners.

The most common crypto wallet used in the Philippines is Coins.PH. The app allows users to convert their PHP balance to digital currencies like Bitcoin, Ethereum, XRP, and many others directly from their wallet. You have absolute freedom in your trading amounts – you just cash in whatever amount you’re comfortable buying.

On the other hand, Coinbase specifies an initial deposit of $50. Given the current exchange rate of PHP56 to USD$1, that would be around PHP2,800.

There’s no limit to how much you can invest and trade cryptocurrency in the Philippines. You can trade higher amounts and earn higher profits, like stock trading and forex trading. However, you also face more risk than those buying crypto at lower denominations.

How Much Can You Make From Crypto Trading?

Money From Cryptocurrency in the Philippines crypto trading

Cryptocurrency is considered a high-yield, high-risk investment. This means that price movements can exceed 100% when certain factors are present. As mentioned above, the price in 2020 increased six times due to the financial meltdown caused by the pandemic. If you invested $1,000 in Bitcoin before the COVID-19 crisis, you could’ve earned $5,000 in profits by December 2020.

What Does the Future Hold for Cryptocurrency?

Money From Cryptocurrency in the Philippines its status in the future

There have been numerous changes to the cryptocurrency landscape in the past decade. Bitcoin is now nearing the end of its supply line, and many alternate coins like Litecoin and Doge are populating the market. Once a cash cow open to everyone, crypto mining in the Philippines is now restrictive and expensive to get into.

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Despite these changes, the crypto market is poised for further growth. This is because of the shifting attitude of the public and the authorities toward the alternate currency. For instance, Bitcoin is now accepted as legal tender in countries like El Salvador. This marks potential growth in transactions involving Bitcoin, which, in turn, will also drive growth in the sector.

Because of these, Allied Market Research estimates a triple growth in the global cryptocurrency market by 2030.

Conclusion

Making money from cryptocurrency in the Philippines is expensive, risky, but very rewarding. Not all Filipinos may be able to join that market, but those who can do so are in for treats. In other words, there’s plenty of money to be made from either cryptocurrency mining or crypto trading. If you’re interested in creating a business out of cryptocurrency, you could consider the best personal loans in the Philippines as a funding source. If you’re qualified, you can borrow money that you can use to set up your crypto mining rig!

 

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