Everyone makes mistakes that won’t stop the world from spinning, but when it comes to your finances, errors can cost you. The good news is that knowing these common credit mistakes can help keep cash in your pocket, from organization to avoiding bad habits.
Mistake #1: Unorganized FinancesYour payment history is a big part of your credit standing, so late or missed payments can send your score plummeting. Avoid making this common mistake by creating a bill payment system, whether it’s a chart of your due dates and the amounts or an email opt-in for a reminder from your lenders. There are several online resources and calculators, that help make managing your finances easy.Having a system in place will help you avoid paying your bills late, which will protect your credit score, and your wallet, from penalty charges.
Mistake #2: Ignoring Your Credit ReportNeglecting your credit report is another common credit mistake people make. Checking all three of your credit reports regularly is a good way to ensure the information is accurate and up-to-date.
Inaccurate information can cause your score to drop and can also bea red flag for identity theft. If you do find something inaacurate, there are steps you can take to correct the information. If the information is accurate, but unflattering, your best bet is to wait for the information to come off of your report in time and learn from your mistakes.
Mistake #3: Confusion About Best BehaviorKnowing which factors influence your credit-worthiness is important. Take a good look at your spending and payment habits as well as your credit and financial planning. Then make an honest effort to improve your behavior. Maxing out credit cards, frequently applying for new lines of credit, and missing payments can equal bad news for your credit score and your finances in the form of higher interest rates, less favorable terms, and more fees.
Once you understand these three common mistakes, make it a routine to look for red flags and avoid falling back on bad habits. Frequent late payments, being turned down for credit based on information in your credit report, and even reduction of your credit card limit on existing accounts should send off alarms. If you find your credit score is suffering, seek the guidance of a financial advisor to help you stick to your goals and establish good habits for years to come.
This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.
Published by permission from ConsumerInfo.com, Inc. © 2013 ConsumerInfo.com, Inc. All rights reserved.