5 Common Mistakes that Lower Your Credit Score

Every month you might be making mistakes that lower your credit score. There are a number of things that people do without even knowing the negative consequences that come with them. Here are a few mistakes that you might be making to hurt your credit score. 

1. Too Many Accounts

Everyone is bombarded with a number of credit offers almost on a daily basis. The promise of low or no interest gets a lot of people to sign up for new cards. While it might be tempting to transfer a balance onto a new credit card, it will actually have a negative effect on your credit score. While it is good to have some credit, it gets to a point where you can have too many accounts. A credit bureau will look at that and lower your score a bit because of it.

2. Avoiding the Minimum

Many people that have large credit card balances do not even make the minimum payment on their accounts. This has a very negative effect on your credit score. Your account will be reported as past due, which will reflect very negatively on your record. On top of that, you will probably rack up some major late fees as well. Those will add up quickly and your credit card balance can spiral out of control, causing further problems. 

3. Late Payments

When you pay your bills is the single biggest factor in determining your credit score. If you always pay your bills on time, there is a good chance that your score is high. If you sometimes make late payments, your credit score will be less than perfect. If you consistently miss payments, your credit score will look terrible. Get on a schedule again, even if you can only swing the minimum payment. It will make a very big difference in your score.

4. Maxing Out

Just because you have a $10,000 credit limit does not mean that you are supposed to go out and spend $10,000. Many people leave their credit cards maxed out at their limit all the time. While it may be a stretch financially, see if you can get your balance down to about 30% of the limit. When a credit bureau looks at your file, this is one of the main things they look at. 

5. Ignorance

Many people consistently remain in the dark about their credit situation. You can obtain a free copy of your credit report every year if you want. This will help you see what you need to work on and get moving. You can not properly improve something if you do not know what is hurting you. Having a little information can go a long way toward helping you fix the problem. Consistently monitor your credit report whenever possible. It is a good idea to sign up for a credit monitoring system at some point as well. They can alert you when something happens to your report. Single out problem areas on the report and work to fix them as best you can.


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