Credit Mistakes to Avoid at Any Cost – Credit Tips

Credit Mistakes to Avoid- If you’re in need of credit repair, it’s something that you have to devote time and energy toward working on. Repairing credit takes commitment and a proper understanding of how credit is configured. And while improving your credit score isn’t something that’s easy or fast to do, harming it is something that is.
With that being said, here’s a look at the five most common blunders people make that harm their credit score. Knowing these could be the credit tips you need to keep your score favorable and not poor:

  1. Not paying bills on time: Payment history accounts for 35 percent of your FICO score, specifically if you’ve made on-time payments. A late payment won’t just incur late fees and possibly higher interest rates, but it can immediately dock your credit score of anywhere from 80 to 110 points.
  2. High debt-to-credit ratio: Ideally, it’s recommended that you keep debt-to-credit ratios at about 30 percent for the best possible score. So if you have one credit card and a credit limit of $10,000, keeping it no higher than $3,000 is ideal. Anything more will drop your credit score, so take debt management seriously.
  3. Bad debt: Simply put, don’t let any bills go to collections. Not only will they stay on your credit report for up to 7.5 years, they’re not good for your overall finance picture.
  4. Hard credit pulls: Hard credit pulls are done any time someone is officially approving you for some sort of credit line. They also impact your score by about 5-10 points for every pull and stay on your report for up to two years. Simply put, know the difference between a hard pull, which docks your score, and a soft one, which doesn’t. Many consumers don’t and are surprised to see their score so low.
  5. Check your credit report: You should regularly check your credit report – ideally, once a month. Why? Because it’s estimated that up to 40 million Americans have some sort of mistake on their report. By staying on top of your report, you can monitor and dispute incorrect information, which could be bringing down your credit score.