FinancialPlanningAdvices.com » How to Repair a Poor Credit Profile Advices » Common Mistakes Affecting Credit Score

Common Mistakes Affecting Your Credit Score

The credit history you have will greatly influence the types of loans you can get for the financing of a house purchase or education. This leads to the conclusion that you should work hard on the establishment of a good credit history.

Thus, once you start in the credit field, do it right so that you eliminate any bad marks in your credit report. There are several mistakes that starters commit, including:

  • Charging what they cannot afford

    Avoid this common mistake and make purchases that you can cover in full when payment is due. This will show your potential lenders/creditors that you are a responsible client, who knows to borrow what s/he can afford. In this way it will be easier for you to borrow money in the future. Additionally, you will not end up in deep debt.

  • Using large amounts of the credit

    Another commonly committed mistake is the use of large amounts of the available credit. However, a rule of thumb you should follow is that it is better to stay 30% below your credit limit. The maxing out of your credit may make it difficult for you to repay what you have borrowed.

  • Accumulating too many credit cards

    The more credit cards you have, the more you will use them and in deeper debt you will get. Start with one or two in order to learn how to use them responsibly and then think over the possibility of applying for another.

  • Late and partial payments

    Many beginners fail to make their payments on time and as a result their credit report is negatively affected. The monthly payment of your balance shows your responsibility. Your credit score will be significantly improved by the timely payments you make since they represent a big component of it.

Rate this article : Low
  • Currently 2.8/5 Stars
  • 1
  • 2
  • 3
  • 4
  • 5
High