6 Costly Mistakes that Kill Your Credit Score

If there is one number that really affects your financial future, it’s your credit score. Having a good or bad credit score affects you on a number of levels. Whether you are buying a house or car, renting an apartment, or getting an insurance policy – your credit score helps you save money with better interest rates.nnBecause your credit score is a moving target that shifts with every financial transaction you make, it’s smart to monitor it regularly so you can proactively manage your credit score. By checking your credit report once a year, you can spot problem areas and make moves to correct them .nnHow can you take action to ensure that your credit score remains high? Here are some of the biggest mistakes people make that knock down their credit score.nnAre you making these 7 Costly Mistakes that Kills your Credit Score?nn1. Making “slow as molasses” payments – Sending in a late credit payment can negatively affect your credit score. Even worse is forgetting a credit payment entirely. If you have trouble making payments on time consider adding a reminder on your calendar. Another tip is to setup an automatic payment through your bank. Making a chart to track what bills are due when can also help you to see what payments are made, which ones are still due, and what is still outstanding.nn2. Being a credit pack rat with too many credit accounts – When lenders see you open several new accounts at once, it affects your credit score. Additionally switching card accounts frequently to save on special reduced percentage rates can hurt you too. Lenders want to see a reliable credit history with a mix of older more established accounts. nn3. Living large and spending too much of your available credit – When you use a high percentage of your available credit, it lowers your credit score. Make sure that you don’t use more than 30% of your available credit. nn4.Being a one credit card wonder - When you don’t have an established credit history, it makes you more of a credit risk to lenders. Having 2 or 3 credit accounts shows lenders that you can be responsible in making payments on time to several accounts it increases your credit score. nn5. Applying for too much credit in a short time frame – If you are applying for a bunch of credit accounts at once, you may be hurting your credit score. This sends a red flag that you are credit hungry and increases your credit risk. Avoid applying for too much credit in a short time frame.nn6. Not checking your credit report regularly to discover and fix discrepancies – There may be ghosts lurking on your credit history that can come back to haunt you. In fact about 1/3 of all credit reports have an error on them. Once a year you are entitled to a free credit report from all three credit-reporting agencies. Review your report carefully to discover any items that need to be corrected.n