Credit Score Mistakes to Avoid
Negatively affecting your credit score for the most is accidental and a lot easier to do than you think. Missing payments and over spending on your credit card is only one of the many ways you can hurt your credit score. Simple things such as using 50% of your credit card limit can begin to affect you negatively. More so, a low credit score can start affecting other aspects of your life such as where you live and job opportunities.
Credit scores can be very easy to damage and most times it’s through everyday use. Obviously late minimum payments and maxing out your credit card inadvertently hurts your score, but going over your limit has larger consequences. Whether it’s a dollar or a penny, your credit score can take a 30–40 point deduction. Most times late interest charges, fee penalties, and pending transactions can push your fees over the limit. Banks also take a look at your credit card limit. Any credit card you own with a limit under $1000’s is seen by banks as cause for concern. The ideal balance is constant credit card use, while keeping it under 50% of your credit limit, and making all your minimum payments.
A damaged credit score follows you everywhere and can affect you in more ways than just receiving loans or mortgage approvals. Some employers require a credit check in their hiring process. Landlords as well, will check their potential tenant’s credit score when it comes to renting them an apartment or condo. Insurance premiums are affected as well if you have defaulted on payments with any previous insurance companies, in turn causing a spike in your monthly insurance bill. If you can’t make the minimum payment, its best to give these companies a call and for the most part they will have payment extensions or payment plans.
Unfortunately, hurting your credit score is very simple and for the most part accidental. Always speak to a financial advisers if you have questions, they will know best. Our next blog will touch on the positive ways you can affect your credit score and strategies you can use to repair it.
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