11 Most Common Credit Score Mistakes

You use your credit card regularly, pay the bill every month and avoid taking on too much debt. Your credit score must be in great shape, right, Maybe not. Even the most well-intentioned credit users can end up harming their credit by making simple mistakes. And having good credit is important, even if you don’t plan to borrow money. For instance, about half of Americans don’t know that bad credit can restrict their choices for cellphone service, according to a NerdWallet study. Here’s a look at the most common credit mistakes that can lower your score.

Building credit is a bit of a Catch-22. You have to use credit to establish a credit history, but you can't get credit unless you already have a good credit score. Unfortunately, avoiding credit cards and other loans completely means you won't have any credit history or score. That's bad news even if you don't have any plans to borrow money, as your credit score affects many major areas of your life. The fix: The good news is you don't have to spend irresponsibly or go into debt to build credit.

Putting just a couple of recurring expenses, such as your cellphone bill, groceries or gas, on your credit card each month and then paying the balance by the due date will get the job done. Although opening and actively using a credit card will help you establish good credit, it’s only one piece of the puzzle. “People with a mortgage, car loan, credit card and other types of loans will have a higher score than someone with just credit cards,” explains Randall Yates, founder and CEO of The Lenders Network.

That’s because 10 percent of your credit score is dependent on having a mix of credit, which shows lenders you’re capable of handling various types of credit. The fix: If you don't have a great mix of credit, Yates suggests getting a personal loan from your local bank or credit union instead of another credit card to improve your score.

Don't change the way you spend just to snag a big sign-up bonus from a credit card. Whether you finally paid off one of your credit cards or have one you don’t use anymore, it might seem like closing the account is the responsible thing to do. Unfortunately, closing a credit card account is a fast and easy way to lower your credit score. Ignoring your credit report is one of the biggest financial mistakes that you can make,” warns Friedman. Checking your credit reports from all three of the major bureaus - Experian, Equifax and TransUnion - on a regular basis is the best way to find and fix credit report errors that could hurt your credit score.

Also, you may find false information that is adversely affecting your credit, but at only one credit bureau. There are many credit monitoring packages available and most will offer a combined 3 bureau credit report. This can be a great convenience since the format of credit reports from each agency is different. The combined 3 bureau credit report will be in the same format and will make it easier to spot the differences in the different bureaus credit report.

Once you have great credit you will most likely want to do everything you can to keep it that way. For this reason, monitoring your credit reports and scores is vital in maintaining that great credit you worked so hard for. All of the credit monitoring services that I have reviewed or personally used have email alerts that will let you know about major changes in your credit report or changes in your credit score. Major changes in your credit report of score could be an indication of Identity Theft and so this is one of the best ways to alert you of this possibility.

There are many of us that are not worried about our credit ratings. This often happens at a younger age when we get all those credit cards and use up those unsecured loans. And we are not worried when we are not able to pay off those loans because we feel that the government protects our rights as borrowers.

Fair point, but there is much more to this. Banks are not at all amused when someone defaults on their loan payments. They punish defaulters by reporting them to the credit bureaus. This is where the problem starts. Before we get into what these problems are, we would like to mention that Dallas credit repair or credit repair San Antonio is a possibility. When someone has their credit score damaged and they don’t opt to get Dallas credit repair or credit repair San Antonio done, there are three basic problems that they face.

When you read about these basic problems given below, you will easily see that it is important to maintain your credit score. And if for some reason, your credit score is damaged, you have to get Dallas credit repair or credit repair San Antonio done. When your credit score is low, it is very difficult for you to get a loan. All banks and other lending institutions (apart from the shady ones) have various credit appraisal processes.

But all of them look at credit scores of potential loan customers. A low credit score means you are not to be trusted. And this is where you may face multiple rejections for loan applications. In continuation with the discussion above, even if a bank is willing to lend you money, they are going to ask for much higher rate of interest.

You may be aware that when your start making loan payments, you pay more off the interest portion in the beginning than the principal portion. This means you end up paying a lot of interest to the bank. Many employers today do a credit check before they hire someone. This again is done because employers want trustworthy employees.

They don’t want someone that has defaulted on their loans and thus, cannot be fully trusted. Thus, if you don’t keep a proper credit score or don’t get Dallas credit repair or credit repair San Antonio done, you could be losing out on some very lucrative jobs. Isn’t it very clear that you get hit rather hard when you don’t pay your loan and your credit score goes for a toss, And isn’t it also very clear that if you don’t get Dallas credit repair or credit repair San Antonio done on time, the situation could worsen even more,