Its hard to maintain a good credit score even when you work hard to keep it in good standing. With credit utilization ratios, credit histories and even identity theft threats to concern yourself with, its important to take every step possible to make sure that the rest of your finances in order.
How can you do that? By avoiding silly mistakes that are sure to lower your score. Here are a few to avoid
Refusing to Pay a Business and Allowing Them to Sue You
Sometimes you may not want to pay the business that you feel has mistreated you. However, its not a good idea to simply refuse to pay them as some sort of punishment because the punishment will undoubtedly be yours.
Companies have the right to report to the credit bureaus if you owe them anything, so while you may be angry, its important to work out your differences before the company tries to send your debt to collections or worse, take you to court for the balance due.
Applying for a Ton of Credit Cards
Another mistake that some people make is assuming that applying for a ton of credit cards is a good thing. In actuality, applying for a lot of credit cards can hurt your score.
Each time that you apply for a new card, you grant a creditor the right to pull information from your credit report. This is known as a hard pull or hard check. And each one lowers your score by around five points for as long as six months.
So if you have a ton of hard pulls show up on your report because you went on a serial sign-up spree with every credit card issuer and retailer you could, your score could quickly drop and remain that way for a long time!
Forgetting to Pay Your Credit Card on Time Every Month
Anyone can be late paying a bill every once in a while, but making late payments on your credit cards, student loans, car note, mortgage or any other bill that is reported monthly is sheer sabotage, especially if you can actually make the payments on time.
Late payments on your credit report show up for the length of time that the account sits on the report, so the last thing you want to do is lower your credit score substantially and unnecessarily. If you have to, make a schedule of your payment due dates to ensure that a little laziness wont result in a lot of messiness on your report.
Racking Up Unpaid Library Fines and Parking Tickets
The easiest way for people to go against their desire to improve credit is by failing to pay the simplest debts like library fines and parking tickets. If you owe $20 to your local library, just pay them back. Dont wait for them to send your tiny debt to a collection agency (because they will).
If a collection account shows up on your report, it could sit there for up to seven years, even if you pay after the fact. So to avoid unnecessarily lowering your score by up to 100 points pay your library fines and parking tickets.
If youre not sure what is showing up in your credit history, you could take advantage of a credit report with a free score from Go Free Credit. By checking your report, you could not onlycorrect previous mistakes, but also determine what mistakes you wont make in the future that could lower your score.
