Your credit score can be affected by almost every action you take financially. You may be doing things that are adversely affecting your credit score and not even know it.
These common credit mistakes may seem harmless, or you may not be aware of how credit is tabulated and what that means for these seemingly innocent actions. These common credit mistakes could be contributing to a credit score that is lower than it should be.
Get A Lot Of New Credit Cards
This is a common mistake and happens even more during the holiday season. Often store credit cards allow you to save some money just for signing up for their store credit card. It seems like a good way to save a buck when you are at your spending peak.
The problem is that signing up for a number of new credit cards can decrease the age of your credit history. This may seem counterintuitive, but the age of your credit history is figured out as an average. This means that newer cards are going to pull the average down, and the more new cards there are the lower the average age is going to be. Your long standing accounts of many years are averaged with all these new ones and suddenly it may appear to anyone viewing your credit report as though you have only had credit for 5 years instead of 20.
Forget Or Avoid Paying Other Bills
Not paying off other bills can adversely affect your credit score too. This includes bills that seem inconsequential such as parking tickets and library fines. Any unpaid bill can be turned over to a collection agency. This collection agency can report your failure to pay any bill which can damage your credit score.
This is true for many organizations that ordinarily would not report your billing matters to any credit bureau. That is, they will not report your information to a credit bureau until you stop paying or are late in making payments. At this point, these organizations can report this information to credit bureaus and lower your credit score.
Even if they do not report this information then the collection agency that they bring in to collect the amount that they are due will report it. Either way, it will turn into a mark on your credit history that could have been avoided by simply paying your non-credit card bills. In short, for your credit’s sake, pay off all bills. This includes library fines.
Pay Bills Late
This is common sense, but some people pay their bills late all the time. You may figure that you are paying them so it should not have much of an effect on your credit, but it does. It is all about the risk of this pattern being repeated.
If this pattern is already clearly demonstrated in your credit history then it is likely that you will continue it in the future. This amounts to a low credit score that will make any lender think twice before working with you.
These common credit mistakes can give you a low or even an abysmal credit score in no time flat. If you get a lot of new credit cards, miss payments on non-credit card bills, or make late payments then your credit can suffer. The way to avoid it is to avoid these common mistakes.
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Tags: Common Credit, Credit
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