How’s your credit score?
This is a question that is very important as asking you – how’s your day?
The reason why people are very particular about credit scores is that this determines a lot of aspects. These include the decision to approve your loan applications, getting accepted to a new job especially those related to finance, and buying a new house.
It’s time to start being aware of your credit scores as well. Thus, here’s a great post to read on fixing credit and knowing what harms your credit score.
You stroll around the mall, shop for your favorite items, drop by a car offering and sign up.
You are not aware that even these innocent-looking actions may affect your credit scores in a surprisingly negative way.
When you sign up for credit offerings, you are hurting your credit scores. The mistake about these is not merely just knowing that you should pay your bills on time. This is part of the points that you should look after, but there are more.
Paying Bills Late
Most articles and resources that are written about the most common mistakes that harm your score talk about the necessity of paying your bills on time.
The idea here is simple: credit scores change with every late payment because this is often a measure of your trustworthiness as a consumer.
When loan companies deal with clients that are used to pay their bills late, do you think they will trust them? Not in a million times. Late payments for credit damage your rating as much as on-time, and early payments can positively affect your score.
- Therefore, you have to do your best to make payments regularly according to the deadline. Never forget about paying at least the minimum on time, so you are always on the right track.
- A debt that is missed can already affect your credit scores significantly. This means that even if you just lost a fee for one or two days, the results will be reflected in the reports.
Inability To Pay Your Health Care Bills
Your medical bills are also part of those rated with your credit scores. In fact, around half of the entire collection items that credit bureaus receive in reports are associated with health care bills, according to the CFPB. Gaining a debt from a medical service is said to reduce scores significantly.
- For instance, not paying a bill worth $100 may result in a drop in the score by around 100 points. Think about the case when you are already way below the threshold, and you are unable to settle your medical accounts. Moreover, it has been said that when an item reaches the report, it may stay there for seven years.
Posting Your Credit Card Information
In the world where people are fascinated by online airline bookings, online shopping, and web-based deals, they just blindly crucial in their credit card information without personal discretion.
- When you do this, you are revealing your information to the cyberspace. Talking about the Internet, it is an open zone.
- It is essential to be careful about sharing your credit card details anywhere to avoid fraud and losing your identity to unknown individuals. If you see something suspicious on your accounts, immediately contact your institutions to report these.
Becoming A Co-Signee To A Loan
You may have heard people who advise you that co-signing a loan may improve your credit scores. However, there are some instances when these loans are way too high that the burden of payment may be transferred to the co-signee.
So where do you draw the line?
- Co-signing means that you assume the responsibilities of paying for these loans, either committed by your spouse, children or cousin when they are unable to do so. Lousy credit sometimes rises through these instances.
- When it is inevitable for you to tag yourself along as a co-signee, be sure to read all the terms and conditions and know your financial capacity.
Opening New Accounts, Lines Of Credit
Many people are fascinated by opening new accounts when they find privileges and perks that are not found on their credit cards. They fall prey on advertisements that enumerate all the luxuries, perks and points that you can enjoy especially when they are redeemable for free cars, for instance.
You can always open new accounts provided that you can handle them right and pay them on time.
- However, if you open new credit lines that you do not need, you are thoroughly hurting your credit scores.
- Owning an excessive number of accounts within a short period decreases the “average account age” which will erase all the positive benefits of keeping older accounts. It also opens up inquiries that can negatively impact the score.
The next resort for most individuals when they believe they cannot pay the dues is to close the credit account. This is always possible but is this safe for your credit scores?
The answer is a resounding no. The best way to take is to keep these accounts open since closing some of these statements may also hurt your credit scores.
Sometimes, we fail to realize that even the most common things we do can be the cause of low credit scores. This means we have to pay attention and carefully plot the things we spend and save up for, as they all can affect our financial future.
Proper planning can be of great help to secure a good credit score.