5 Credit Score Mistakes You Can Easily Avoid
Share this @internewscast.com

Maintaining your credit score requires careful money management and attention to detail. Even the smartest consumers make simple mistakes that can dramatically impact their credit scores. Here are five credit score blunders even savvy people make. Being aware of these may help you avoid an unnecessary decline in your credit score.

Applying for Too Many Accounts

No matter your credit rating, chances are you get bombarded by loan and credit card offers on a regular basis. Nearly every retail store seems to offer a “special discount” for signing up for their credit cards, on top of all the card offers you receive in the mail each month. In spite of these opportunities, be careful how often you apply for credit offers. Having too many inquiries on your report especially in a short amount of time can negatively impact your credit score.

The issue here is not comparing loan offers or credit cards. For instance, if you are looking to buy a car or a house, it is logical to apply with several lenders to find the best rates. The issue we are talking about is applying for a wide variety of accounts over a long stretch of time. Eventually creditors will assume you are desperate for credit, and you may have a red flag on your credit report.

Be selective when you fill out credit card and loan applications. Do your research before you allow the lender to pull your credit so you can limit the number of inquiries.

Canceling Old Credit Card Accounts

If you haven’t used one of your credit cards in a long time, you might be tempted to cancel it. In actuality, it may work in your favor to keep that account open even if it isn’t in use. One factor in determining your credit score is the length of credit history. As long as these unused cards have no balance, they are acting as long-term references for other creditors in the future. Having the accounts open will also lower your debt-to-available-credit ratio, one of the most important factors in determining your credit score.

If you have annual fees on your card or you are constantly tempted to make incremental purchases with that card, cancel it to protect your finances. You may see a little drop in your credit score for a period of time, but you can recover from that. It is only wise to keep these accounts open if they are not costing you any money during the year.

Getting Trapped by Introductory Offers

Introductory interest rates and rewards programs are great, but they can lure you into opening an account you don’t really want or need in the long run. If you are shopping for a new credit card, don’t just look for a card with a great rate for the first 12 months. Try to find a card that will help meet your needs for several years. Realize most introductory rates come with a catch. If you are late on a payment one month, your introductory rate could be canceled and you’ll immediately begin paying the ongoing APR. This is an easy way to dig yourself into further debt.

In general, stay away from store credit cards. They try to lure you in with a certain up-front discount, but they normally have very high APRs.

Cosigning for Friends and Family

If you have good credit and a stable income, you may be asked by someone you care about to cosign on a loan or credit card. No matter how much your heart may want to help this person, cosigning could be asking for trouble. If that person can’t make payments on the account, you will have to in order to preserve your credit score. This relationship can quickly turn sour if you are constantly having to pay someone else’s debt.

Ignoring Unused Credit Accounts

Keep an eye on all your open credit and bank accounts, even if they are not very active. You may not need to check them daily, but it would be wise to look over them once a month. This helps you catch an unauthorized charge on the account as soon as it occurs. Most creditors will correct the issue relatively quickly if you catch it shortly after it happens. It may take several months to get matters cleared up on your credit report, so check these unused accounts once a month to catch any errors.

Share this @internewscast.com
You May Also Like

Is Roe Vs Wade Just The Latest Blow To Democracy?

WASHINGTON, DC – JUNE 24: Abortion-rights activists Carrie McDonald (C) and Soraya…

Nexo responds to accusations of stealing donations, siphoning funds from charity

Cryptocurrency lending platform Nexo has hit back at what it called “fake…

The Most Practical Green Technology?

A new floating solar panel system is deployed on Big Muddy Lake…

How Can We Improve Social Security And Economic Security In The United States? NASI Offers Food For Thought

Social Security Benefits form Getty Earlier this month, the National Academy of…

Russia Defaults On Its Foreign Debt As Grace Period For Payment Expires, Reports Say

Topline Russia has defaulted on its foreign debt for the first time…

Actors Ariana DeBose, Anya Taylor-Joy, Marco Rodriguez Among Latino 2022 Academy Invitees

Ariana DeBose poses with her Oscar on March 27, 2022; Anya Taylor-Joy…

2022 bear market has been the worst on record — Glassnode

Several factors have contributed to making the current crypto bear market the…

Cash Is Bad For Us

No-one listens to me about anything, least of all the future of…