Staying on top of credit should be taught at an early age and guided as those are entering to have financial responsibilities. Having great credit does take years of discipline, patience, and proper spending and payment track records. Make sure to stay away from the largest ways to impact credit scores.
Paying by the due date is important so interest rates and late fees do not incur, but any payments that are thirty days late are reported to credit bureaus. Thirty-five percent of your credit score is made up from payment history, so not only do late payments show creditors you are not worthy and damage your credit, they also stay on your report for seven years. Only the best credit repair companies are able to help you rectify your mistakes and improve your credit score.
Maxing Out Credit Cards
Credit utilization by level of debt is another large factor in overall credit score, so if you take the balance of your credit account compared to the credit limit, if you are close to that, scores are drastically reduced. Make sure you put the credit cards away and start to pay down balances, for scores to increase, but to also get out of sinking debt.
Too Many Credit Inquiries
Every time a lender pulls your credit report to review for a possible loan or credit card, there is a hit to your score, and stays on the report for a couple years. Too many inquiries within a short amount time can send the wrong message to lenders, so make sure of what the credit impact will be and which loan you are in the market for.
Ignoring Other Financial Responsibilities
Sure you may be making mortgage, loan, and credit card accounts on time, but do not forget about other necessary bills such as medical, cable, or electrical, as they may not report regular payments, but will sure report any delinquent balances that you have not paid.
Ignoring any Inaccuracies with Your Report
Any potential fraud on your account could not only lower credit scores, it could leave you on the hook for any potential charges if not addressed right away. Anyone can make mistakes, even credit bureaus, so it is important to pull a free copy of your credit report at least once a year to review for mistakes. If looking for your credit score, most creditors are now including with monthly statements, or clickable in your online account.