Some credit score killers are hard to avoid, such as missing a mortgage payment because you lost a job or maxing your credit cards because you are flooded with medical bills. But many of the common credit mistakes are simple mistakes that are easy to dodge.
Here are five credit mistakes that you have no excuse for making – no matter what shape your finances are in.
Forget about paying your bills on time
You could have all the money you need to pay off your loans, but if you don’t keep an eye on when your bills are due, you could easily dent your dent with just a random 30-day late payment. If you miss an invoice of just a few days, your bank cannot report the late payment to the credit bureaus. But it could still be responsible for a painful late payment. For example, many credit cards charge reminder fees as high as $ 38 for repeat offenders. If you frequently make payments out of your bill payments, use the automatic payment service from your bank so you can be sure that you have paid at least the minimum amount due. Many banks also offer email and text reminders,
Prioritize other loan payments over your credit card bills
Many people who prioritize their bills to pay larger loan payments struggle, such as personal and auto loans, through their credit cards, according to the Transunion credit reporting agency. As a result, late payments on credit cards tend to be more common. But skipping out on a credit card statement just because your finances are tight is a mistake. Most credit cards charge a minimum of only 1 percent of your scales, plus interest, or 2 percent of the balance sheet total. So for example, if you owe $ 1,000 on a card that tops up a minimum of 2 percent of the total balance, you’d only expect to pay $ 20 – that’s not much more than the cost of a big pizza.
Throw or file your bills without going on them
It can feel like a chore to comb through your bills for incorrect or mysterious loads. But don’t do it just because it’s boring. You could pay for a fee you don’t make, or miss your chance to dispute an incorrect load from a dealer. The Fair Credit Billing Act gives you the right to deny merchant settlement errors, such as incorrect or double fees … But you have a dispute within 60 days of taking advantage of protection. (You’ll have a bit longer if the unauthorized charge is from someone who stole your credit card information.)
But you can’t pay a fee if you’ve never looked at your bill, and you can’t stay aware of the fact that someone stole your credit card. It could be boring, but read your bill.
Ignore your credit reports and ratings
But if you don’t take advantage of this annual benefit, you can never know if credit report mistakes or unauthorized accounts are wrong to harm your credit score. To get your free reports, visit annualcreditreport.com. You can also keep tabs on your credit scores for free by taking advantage of free credit score services offered by your credit card. And you two such services – Discover the Credit Score and MoneyWish Finance is LendWiser – let you see your results even if you are not a customer.
Close an old credit card account
If an old card is going to collect dust in your wallet, you may be tempted to close the account and toss it. But unless you are paying a large annual fee then it is a mistake to close your card. Closing an account could credit your credit score unexpectedly even if you haven’t used the card in months. By closing the account, you will lower the total amount of credit that is available to you, which will negatively affect your credit usage – an important component to your score.
And if it’s your oldest card with a long history of on-time payments, the impact could be worse as this will dent you in the “length of credit history” section. Lenders will see how long-running accounts with positive payment behavior, but closed accounts with a history of on-time payments will eventually drop your reports. Put the card in your sock drawer if you need to but doesn’t close the account; and consider adding a one-time payment to ensure that the bank does not close the account due to inactivity.