It’s common for people to make mistakes regarding their credit without even realizing they’re hurting their credit. Don’t let these three common credit mistakes hurt your credit score.

Ignoring your credit

The first of three common credit mistakes is ignoring your credit score and credit report. According to the Federal Trade Commission 21% of people have an error on their credit report. Checking your credit report and score on a regular basis (monthly or bi-monthly) gives you valuable insight into not only the health of your credit, but any misleading, incorrect or inaccurate information that may be on your credit report.

If you see any errors, work with a reputable credit repair company. Credit repair is an investment that pays for itself if you work with the right company. Having good credit can prove invaluable when you’re applying for new credit.

Late payments

The second of three common credit mistakes is making late payments. We can’t stress this enough. Never make a late payment if it can be avoided. Your payment history is the heaviest factor in your overall credit score accounting for 35 percent of you total score calculation. One late payment can drastically lower your credit score, especially if you have an excellent (850-750) or good (719-750) credit score.

If you’re behind on payments, call your creditor. Communication is key. Most credit companies are happy to work out a realistic payment plan to help you get caught up and stay current on your payments. You’ll see a nice little bump in your credit score as you start making your payments on time every month.

Overusing your credit cards

The third of the most common credit mistakes is using your credit cards too much. Did you know that your credit utilization rate is the second highest factor in your overall credit score calculation? 30 percent of your credit score is derived from how much credit you use on an ongoing basis. Never overspend on your credit cards or go over your credit limit because this can also reduce your credit score. A good rule of thumb to remember is never use more than 30 percent of your available credit. Just because you have a $1k credit limit on your card doesn’t mean you should get anywhere near that limit. If you follow the 30 percent utilization rule, you’ll never spend more than $300 on that $1k card during any given time.

We know how tempting it is to just “charge it.” You have every intention of paying the charges back before they roll over to the next month, but it doesn’t happen. Everyone makes this mistake before they’re aware of how over utilization of credit accounts can affect their credit score.

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