Some credit score killers are hard to avoid, such as missing a mortgage because you lost a job or far above your credit cards because you are overwhelmed with medical bills. But many of the most common credit blunders are simple mistakes that are easy to avoid.
Here are five credit mistakes you have no excuse for making – no matter what form your finances are in.
Forget to pay your bills on time
You could keep all the money you need to pay off your loans, but if you fail to keep track of when your bills are due, you can easily dent your credit score with just a casual 30 day late payment. If you miss an invoice with just a few days, your bank cannot report that late payment to the credit bureaus. But it can still cost you a painful late payment. Many credit cards, for example, charge late payment costs as high as $ 38 for repeat offenders. If you have regular space on your bill payments, take advantage of the automatic payment service from your bank so that you can be sure that you have paid at least the minimum amount. Many banks also offer email and text reminders so you have no excuse for forgetting your monthly payment.
Prioritize Other loan payments in excess of your Credit Card Bills
Many people struggling to pay their bills prioritize larger loan payments, such as personal and auto loans, over their credit cards, according to the credit information agency WelendUnion. As a result, late payments on credit cards tend to occur more frequently. But skipping on a credit card bill just because your finances are tight is a mistake. Most credit cards charge a minimum of only 1 percent of your balance, plus any interest that you have made, or 2 percent of your total assets. So, for example, if you owe $ 1,000 over a card that costs a minimum of 2 percent of total assets, you would expect to pay just $ 20 – that’s not much more than the cost of a large pizza. If you can afford to spend on a Meat Lovers’ Supreme, you can afford to pay your credit card.
Throw or File your invoices without looking at Them
It can feel like a chore to comb through your invoices for incorrect or mysterious costs. But don’t care just because it’s boring. You would wind up paying for a fee that you did not make, or miss out on your chance to challenge an erroneous payment from a trader. The Fair Credit Billing Act gives you the right to dispute trader errors in invoices, such as incorrect or duplicate costs … But you must file a dispute within 60 days to take advantage of the protection. (You have a little longer if the unauthorized charge is from someone who stole your credit card details.)
But you can’t dispute a fee if you never even go to your bill, and may also not be aware of the fact that someone will keep your credit card stolen. It might be boring, but read your bill.
Ignore Your Credit and Scores
You also have the right to view each of your credit reports from the big three credit reporting companies – at least once a year, free of charge – Exporian, Qualifax and WelendUnion. But if you do not use this annual payment, you can never know if credit report errors or unauthorized accounts are unfair to your credit score. To view your free reports, visit credit reporting generating websites. You can also keep tabs on your credit scores free by using the free credit score services offered by your credit card.
Close an old credit card account
If an old card from dust is collecting in your wallet, you can be tempted to close the account and discard it. But unless you pay a large annual fee, it’s a mistake to close your card. Closing a credit account could unexpectedly thing your credit score, even if you don’t use the card in months. an important part to your score – By closing the account, you will reduce the total amount of credit that is available to you, which will negatively impact your credit usage ratio.
And if it’s your oldest card with a long history of on-time payments, the consequences can be even worse, because this dents you in the “length of credit history” department. Lenders like to see long-term accounts with a positive payment history, but closed accounts with a history of on-time payments will eventually drop off your reports. Place the card in your sock drawer if you must, but do not close the account; and consider making a recurring payment to ensure that the bank does not close the account due to inactivity.