One area where we'd all do best to avoid making any mistakes is with our credit score. Doing so can mar your ability to get approved for loans or get a low rate. We'll help you stay on top by reviewing these seven credit score mistakes nobody should make.
Your payment history matters greatly. Even just one missed payment can set you back on your credit score. Sure, over the long haul, a missed payment here and there won't do that much damage. But if lenders see a pattern emerge, they will be hesitant to approve you for any loans.
Failure To Pay Minimum Amount Due
Think of the minimum payment as the bare minimum. Meaning that lenders really want to see you paying a higher amount to show that you are a responsible borrower. But failure to tender this bare minimum amount will also lead to your account coming past due (see our first mistake to avoid).
Too Much Debt
A good rule of thumb here is to keep your balances below the 30% threshold. Otherwise, you may look desperate or risky to lenders. You could get rejected for loans or you could be approved at much higher interest rates that cost you a lot more in the long term.
Too Many Cards
You don't want to accept every single credit card offer that comes your way. Doing so can overextend your borrowing power and worry lenders. Instead, keep a good amount of cards available. A good rule of thumb is to use three or four cards routinely and have a few store charge cards available as well.
Not Alerting Creditors Of New Name/Address
Make sure you always keep your accounts up to date with your recent name and address. This helps you stay on top of your obligations by assuring that your bill is always delivered on time. It also keeps your credit report updated as well.
Failure To Check Your Credit Report
If you are not checking in on your credit reporting frequently, you are not in the know. Doing so can help you avoid identity theft or erroneous reporting. Both help you keep a secure hold on your coveted credit rating.
Not Using Your Full Legal Name
If you are not using your full legal name, you could end up with misinformation on your credit report that's more difficult to dispute. For example, when children and parents share the same name, often their information shows up on both reports. By using your first, middle and last name, you can reduce the propensity for errors.