MISTAKES with paintbrush in woman hand. Business decisions mistake concept
Whether you are renting an apartment, applying for a loan, or buying a house, your credit score is one of the first things people will check to determine the financial risk. Having a good credit score opens up a variety of opportunities. At the same time, a bad credit score can limit your options.
Is a bad credit score negatively affecting your life? Here are some of the biggest mistakes that could be taking a toll on your credit score?
1. Applying for Too Many Cards: Don’t feel pressured to apply for store credit cards every time the offer is available. Even though you can save a % on your purchase, the credit inquiries can damage your score. Be careful to only apply for a credit card that you need, and minimize your applications whenever possible.
2. Missing Payments: Cash flow issues can be a challenge, but do everything you can to be timely with loan and credit card payments. On-time payment accounts for a large portion of your credit history. If you have missed payments, then it makes you look like an unreliable borrower. Always make the minimum payments every month. Ideally, pay more so you don’t rack up high balances.
3. Carrying High Balances: Debt to income ratio is one factor that affects your credit score. If you are carrying large balances, then it doesn’t look good for the lenders to see that you are leveraged so high. Ideally, pay down the balances so you can reduce the ratio of the amount of debt you are carrying compared to the amount of debt available right now.
4. Cosigning on a Loan: Even though your intentions are good to help a friend or family member with a loan, cosigning means that you carry shared responsibility for the bill. If the person misses a payment, then it will negatively reflect on your credit score.
5. Not Paying Attention to Your Score: Staying unaware of your credit score can be damaging, especially if you have mistakes that need to be corrected. Many people have inaccuracies on their credit history, and you won’t be able to fix these problems if you aren’t aware of them. Make it a habit to check your credit score regularly to identify any potential issues that need to be fixed.
Don’t let these common mistakes be the reason why you miss out on opportunities in life. Even if you aren’t making a big purchase right now, it’s important to be proactive in managing a good credit score so you are prepared for the future.
Credit Repair Solutions
Staying on top of your credit is one of the best things you can do to protect your finances. If you are looking for solutions to improve your credit score, then our team is here to help. We help people with credit repair by getting rid of the errors that are dragging down your score. For more information, contact us to schedule a complimentary consultation to review your credit report.
If debt collectors are threatening to take your coronavirus stimulus check, call us at Credit Repair Lawyers of America at (888) 293-2882. You can also email us at gary@crlam.com for a free, no obligation consultation.
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