7 Mistakes That can Bring Down Your Credit Score

7 Mistakes That can Bring Down Your Credit Score
  • Opening Intro -

    Even if you don’t want to buy anything on credit in your entire life and believe in saving up and paying upfront, a good credit rating is still a must-have.

    Good credit will help you with a bunch of things, so it is important to avoid mistakes that will hurt this rating as much as possible.

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Even if you don’t want to buy anything on credit in your entire life and believe in saving up and paying upfront, a good credit rating is still a must-have. You will likely be in the position of wanting to buy a house somewhere in your life, and unless you received a fat sum of money from somewhere, a mortgage will be the way to go.

Good credit will help you with a bunch of other things, too, so it is important to avoid mistakes that will hurt this rating as much as possible.

Here are the most common 7 mistakes that lower your credit rating:

1. Not paying your bills on time.

This really goes without saying. Payment history is one of the biggest parts in calculating a credit rating, so try to pay your loans, bills and credit cards on time. One or two delayed payments won’t ruin you, while a habit of paying late will.

2. Not paying the minimum amount required.

Even if you don’t have the money to pay your balance in full every month, at least put the minimum required amount, which is usually the main interest and fees.

3. Maintaining high debt levels.

If you max out every credit card you own, you show nothing than inability to control yourself and live within your means. A big no-no for anyone looking at your credit history.

4. Having too many credit cards.

Yes, there is such a thing as too many credit cards. You should only have 2-3 credit cards. One main credit card that you frequently used, and maybe 1-2 others which provide good bonuses which you actually use, like frequent travel miles.

5. Not updating information.

This step is so easy to forget. Just write an e-mail or send a letter to your bank once you’ve moved, got married and changed names, or any other personal information update you think is necessary.

6. Not checking your credit report once in a while.

Make a habit of checking this once every 3 to 6 months, to repair any damage or inaccuracy before you need a good credit score. If you don’t, you will find out that one small mistake left unchecked today can deny you and your family a mortgage over 10 or 15 years. Don’t let that happen.

It is a good idea to check your credit report – at least yearly or more. This gives you the change to view your credit position – along with any errors – to make corrections to maintain a strong credit position.

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7. Using other names than your full legal one.

Please use your full name from your other official documents. Including your middle name. If you don’t, there is a possibility that these reports end up in the wrong person’s credit history, which is entirely avoidable on your part.

If you avoid these costly 7 mistakes and set up some good, healthy spending patterns, you should be more than fine from a credit rating point of view. If you ever have doubts, try to think from the other perspective: If I ever wanted to lend money to anyone, what would I like his history to look like?

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Categories: Credit Management

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