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Believe it or not, credit score mistakes aren't only made by people new to credit, and even the savviest spenders could be making common credit score errors including under-compensating for credit inquiry, or simply forgetting about due payments.
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Believe it or not, credit score mistakes aren't only made by people new to credit, and even the most savvy spenders could be making common credit score errors including under-compensating for credit inquiry, or simply forgetting about due payments. Below are the seven most common credit score mistakes, and how to avoid them.
Making less than the minimum payment Minimum payments are not optional payments, they are the smallest amount you can pay and still be current. If you pay any less, it will be counted as a missed payment and can cause financial problems down the road.
Applying for too many things at once Excessive credit inquiry can cause your credit score to drop, leaving you with two options: remove each unwanted credit inquiry with the professional help of Inquiry Busters, or wait 2 years.
Not keeping tabs on your card balance Identity theft isn't as uncommon as you might think. Even if you haven’t used your cards, review your monthly statements and if you see a charge that isn't yours, report it to avoid future financial problems.
Maxing out your credit limit on one card Believe it or not, it is better to have a handful of small, manageable balances than one big one. The closer you are to your credit limit, the more it damages your credit score. To avoid unwanted financial problems caused by bad credit down the road, always keep your balance under 30% of your limit.
Only having one active credit card on file Having only one credit card not only increases the risk of maxing it out, but it limits the potential of your credit score. Even if you don't use them, try for two or more cards.
Having credit limits that are too low A credit limit of $10,000 with a great history is more impressive than one with a limit of $1000 because it shows that the card holder can be responsible with more, not less. It is always better to retain a higher limit and not use it than it is to lower an unused limit.
Failing to establish credit after bankruptcy After bankruptcy, it might be tempting to avoid new credit and more problems, but it's important to get back on the horse and rebuild your credit score as soon as you can no matter what caused the bankruptcy in the first place.
