Credit scores are not like golf scores; you actually need a higher number, not a lower one. There are many things you can do to mess up your credit and lower your credit score, which may make it impossible for you to get a loan or a loan with decent terms.
All too often we learn from our mistakes when it comes to credit; if you have great credit thus far keep in mind these ten principles and you can likely keep your credit score high. If you already have bad credit, begin fixing it now and work with this top 10 list to raise your credit score.
Click through to learn about the top 10 things you can do to lower your credit score:
Exceed your credit limit.
Sometimes this is an easy trap to fall into you have to be careful sometimes a late fee can cause you to exceed your limit, so keep a close eye on your balance. Many credit card companies allow you to check your balance online for free or some will even send you a text message every time there is a credit or charge on your card.
Pay your bills late.
Missing a payment or two can greatly reduce your credit score. You may want to consider automatic payments, either through your credit card or your bank.
Make only the minimum payment.
Making just the minimum payment will rarely actually help you pay off the principle of the debt, which not only means it will take years but you are also causing yourself to have to pay more interest in the long run.
Max out your credit cards.
Just because you have the limit does not mean you should use it. You will receive a better credit score if you only use about 30% of your available credit line.
Close old or unused accounts.
You may have more credit cards than you actually use, but it is in reality better to alternate using one, two or three different accounts every six months or so than one all of the time.
Not knowing what is on your credit report.
Even if you pay your bills on time and carry a low debt-to-income ratio, there still may be errors on your report. You can receive a free credit report once a year through annualcreditreport.com. Be sure to keep a close watch on your report and correct any errors you may notice. Take your credit into your own hands.
Too many credit inquiries.
It is a good idea to only apply for credit only when necessary and only with those creditors with whom you really want to have an agreement. Do not apply with a slew of creditors, hoping that just one might approve - be discriminating.
Not being aware that you have three credit scores.
The three major reporting agencies Experian, Equifax and TransUnion do not necessarily share information, you may want to request a report from each.
Sometimes no credit comes across as bad credit since the potential creditor cannot see a good payment history.
Not protecting against ID theft.
Identity theft does happen. Be sure to keep your personal information such as SSN and account numbers private and only use safe internet sites for online shopping.
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