15 Common Credit Mistakes
1. Using expensive or undesirable types of credit costs too much and is negatively scored.
2. Accumulating too many lines of credit or too many credit cards causes derogatory credit report remarks like “too much consumer credit.”
3. Paying only the minimum due keeps balances too high.
4. Maintaining maximum balances on any credit card or line of credit causes deep drops in scores.
5. Taking cash advances costs higher interest and extra fees.
6. Exceeding credit limit and having to pay over-limit fees causes negative “high proportional amounts owed” remarks on credit reports and subtracts credit score points.
7. Paying a day or more late causes unnecessary late fees and often increases interest rates, in addition to causing derogatory remarks on a credit report.
8. Charging more than you can afford causes a snowball effect of amassing debt with no easy way to pay it off.
9. Letting someone else use your credit, such as co-signing a loan, raises your debt-to-income ratio and possibly adds “too many consumer accounts” on your credit report, which lowers your score.
10. Ignoring credit problems causes unnecessary negative impact. Talk to creditors before being late and make arrangements to skip a payment, pay interest only, or to roll payment over. Confirm their agreement to the arrangement in writing. This action heads off negative reporting to credit bureaus.
11. Failure to report address changes to creditors causes misplaced bills and late payments.
12. Failure to report name changes to creditors also causes confusion.
13. Using partial name, different names, initials instead of whole name, or forgetting Sr. or Jr. creates mix-ups. Use your full legal name to protect yourself from confusion with similarly named borrowers. If you already have credit, use the exact name on all accounts.
14. Neglecting to check your credit report frequently is one of the most common mistakes consumers make.
15. Writing bad checks or making mistakes balancing checking accounts negatively impacts credit.
Establishing credit and wisely managing your credit becomes easier when you know how. You’ll feel empowered by taking knowledgeable steps towards good credit, and you’ll be on your way to purchasing real estate and greater financial freedom.
(c)2005 Jeanette J. Fisher. All rights reserved.
2. Accumulating too many lines of credit or too many credit cards causes derogatory credit report remarks like “too much consumer credit.”
3. Paying only the minimum due keeps balances too high.
4. Maintaining maximum balances on any credit card or line of credit causes deep drops in scores.
5. Taking cash advances costs higher interest and extra fees.
6. Exceeding credit limit and having to pay over-limit fees causes negative “high proportional amounts owed” remarks on credit reports and subtracts credit score points.
7. Paying a day or more late causes unnecessary late fees and often increases interest rates, in addition to causing derogatory remarks on a credit report.
8. Charging more than you can afford causes a snowball effect of amassing debt with no easy way to pay it off.
9. Letting someone else use your credit, such as co-signing a loan, raises your debt-to-income ratio and possibly adds “too many consumer accounts” on your credit report, which lowers your score.
10. Ignoring credit problems causes unnecessary negative impact. Talk to creditors before being late and make arrangements to skip a payment, pay interest only, or to roll payment over. Confirm their agreement to the arrangement in writing. This action heads off negative reporting to credit bureaus.
11. Failure to report address changes to creditors causes misplaced bills and late payments.
12. Failure to report name changes to creditors also causes confusion.
13. Using partial name, different names, initials instead of whole name, or forgetting Sr. or Jr. creates mix-ups. Use your full legal name to protect yourself from confusion with similarly named borrowers. If you already have credit, use the exact name on all accounts.
14. Neglecting to check your credit report frequently is one of the most common mistakes consumers make.
15. Writing bad checks or making mistakes balancing checking accounts negatively impacts credit.
Establishing credit and wisely managing your credit becomes easier when you know how. You’ll feel empowered by taking knowledgeable steps towards good credit, and you’ll be on your way to purchasing real estate and greater financial freedom.
(c)2005 Jeanette J. Fisher. All rights reserved.
posted by Jeanette at Thursday, February 03, 2005
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