There are a lot of different credit mistakes that you will want to make a point of avoiding altogether, because they could cost you a lot, both in the short term and long term. The more time you take to find out what some of these mistakes are, the better your chances will be of maintaining a healthy credit score. Your credit has a huge impact on many things in your life, so you will need to take it very seriously.
1. Missing Payments
One of the biggest and worst mistakes that people make when it comes to their credit is missing bill payments. The more payments you are late on or miss, the worse your credit is going to get. You will need to make sure that you do not miss any payments or keep missed payments to an absolute minimum. This is a very simple and easy way to go about maintaining good credit.
2. Maxing out credit cards
Maxing out your credit cards is just about the last thing you want to do when you are trying to maintain good credit. While it might be tempting to do this at times, it will only hurt you in the end. The amount that you utilize your credit card is an important deciding factor in your overall credit score, so you will need to keep that in mind.
3. Taking out Cash Advances
A lot of people take out cash advances when they need money fast, but it’s almost never a good idea. The fact is that a cash advance on your card comes with some pretty hefty fees that are going to make your regret this decision later on. A cash advance might seem like a good idea in the moment, but you will want to consider how it might affect your credit overall.
4. Chasing Rates
Those who are in debt sometimes open a new account with a zero percent interest rate so they can transfer the balance. The whole idea behind this is that you will be able to take some extra time to pay off your debt without having to worry about additional interest. The main problem with this is that you will be opening a new account, which counts as a “hard” inquiry and can actually damage your credit score as a whole.
5. Applying for lots of different credit cards at once
You definitely don’t want to apply for lots of different credit cards at once, because this too will reflect poorly on your credit. Make sure that you do the necessary research to find the card you really want before making a final decision. By taking the time to do this, you will be able to benefit quite a bit.
6. Co-Signing another person’s loan
If a friend or family member asks you to co-sign on a loan they are trying to get, you must resistant the temptation to help them out. The fact is that if the person is unable to pay off their loan in full for whatever reason, you will be saddled with the rest of it. If you want to maintain your good credit, you will need to avoid doing this ever. Even if you are close to the person, it is still never a good idea. No matter how responsible the person typically is, there is always the chance that you will get stuck with paying the rest.
The fact is that there are a lot of different mistakes that you can make that will potentially damage your credit in a big way, so it is important that you know which the biggest ones are so you can avoid them entirely. If you want to maintain a healthy credit score for the long term, it is imperative that you make a point of avoiding all of the common credit mistakes in this article.
Making even one of these mistakes can have some very serious consequences for your credit, and they are all very preventable. Maintaining healthy credit means being responsible and knowing what things not to do as well as the things you should actively be doing on a regular basis.