Friday, December 30, 2011, AM | Leave Comment
You need to have a good credit score to take out a loan for mortgage, auto or perhaps even get a new credit card (make the last one a question mark). On these pages, I have talked about improving your credit score. This is yet another attempt – a reminder to avoid the obvious and not so obvious mistakes.
If you try to avoid mistakes that can hurt your credit score, you would be able to not only get a loan of any kind but a loan with lower interest rate.
No matter how careful you are, a time comes that you forget to pay your bill and even one day later than the due date can get you into a tailspin that will take some time to unwind.
Avoid if you can the following mistakes:
Don’t be late in your payment
Your payment history is the single most important piece of information on your credit report. Nearly 64 million adults don’t pay all their bills on time, according to a survey by the National Foundation for Credit Counseling, a nonprofit group. Pay all your bills on time, may that be your utility bill, credit card bill, auto loan or whatever.
Don’t close your credit cards
Most experts say to not close any of your credit cards. Instead charge a little on cards that you can easily afford. Logic says closing cards should help in your credit score but credit report works in mysterious ways.
Don’t forget to check your credit report
Be aware of what’s on your credit report. You can easily get three reports from each of the reporting company, one after the other, in one year and for free.
Don’t take it to the limit
You know in life your are most probably successful when you take something to the limit. Don’t do it when you use credit card. Don’t even get close to the limit.
Don’t use cash all the time
Use cash if you want to lower your credit score. It’s not how you use your credit card. The three credit reporting companies look at how you handle debt. In other words, you can improve your credit score if you charge your purchases but pay the bill before the due date.
Don’t forget to shop around for lower rates
This will help you improve your credit score because with lower interest rate, you will pay easily and without unnecessary burden.
Don’t get extra card
All the big stores have their own brand of credit cards. Don’t get one even if they try to lure you with 10%, 15% or more.
In a Nutshell
Carrying and using more than a couple of cards has complicated life for millions. Besides start living within your means so that you can be eventually debt free.