Credit Mistakes That Could Lower Your Credit Score

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Credit Mistakes That Could Lower Your Credit
Score
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• Because credit scores are so crucial to our
  lives, I thought it might be helpful to go over
  things that you should not do and could hurt your
  credit score.  This way, you will not have to
  learn the hard way by making mistakes and watch
  your score drop. It is easy to follow these
  simple guidelines and continue to improve your
  credit.

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Review Your Credit File

• Many credit reports contain errors it is vital
  to make sure all the accounts that are listed on
  your credit file are yours and are reporting
  correctly.  If there are items that do not belong
  to you, they could be damaging your credit
  score.  Besides, it could also be an indication
  that your identity has been stolen.  At the very
  least, your credit report should be checked once
  a year or before applying for credit.  You can
  obtain a free credit report from all three major
  credit bureaus at annualcreditreport.com.  The
  report will not have a credit score, but it will
  allow you to review your credit file.

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Do Not Apply for Credit That You Will Not Be
Approved For

• Companies have specific criteria for approving
  credit for consumers. Its important to know what
  the requirements are before you apply. They will
  review your credit file and will review your
  credit score, positive accounts, and negative
  accounts.
•  When you apply for credit, the company you apply
  with will pull your credit.  This is called a
  hard pull and will result in an inquiry being
  reported on your credit report.  Hard pulls to
  your credit hurt your credit score.

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• Your credit report will look even worse when you
  are not approved for the credit.  Other companies
  who pull your credit in the future will be able
  to see this by reviewing your file and seeing an
  inquiry listed with no open account.  That will
  show other creditors that you were not seen as
  creditworthy.
• It is essential to do some research before
  applying for credit.  If you are applying for
  credit cards, look for cards that will approve
  you based on your score.  If you are interested
  in a mortgage, speak to a lender to determine
  what the criteria is for approval.

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Do Not Charge up Credit Cards to Cover Your
Monthly Expenses

• Sometimes it may seem tempting to pay you bills
  with your credit card when you do not have enough
  money to cover everything, but this is a trap
  that you do not want to fall into.  Not having
  enough funds to pay the monthly bills is an
  indication  that you are overspending and need to
  get on a budget right away.  If you continue to
  use credit cards to pay your bills when your cash
  is low, the usage on your cards will go up and
  cause your credit score to drop.  You will also
  not have the funds available if a real emergency
  occurred.

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Do Not Charge Expensive Items You Plan on Paying
Off Slowly

• When you want to buy expensive items, you should
  save for them and then buy the item.  This will
  allow you to set aside what you can afford in
  your budget each month.  If unforeseen expenses
  come up and a credit card was used, you would not
  be able to skip a credit card payment without it
  hurting your credit score.  Also, credit cards
  charge high-interest rates, and you will end up
  paying more for the item than if you had saved
  for it. You will also have kept your credit card
  usage down, which is 30 of your credit score.

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Do Not Take Cash Advances from Your Credit Cards

• Pulling cash from your credit cards is very
  costly.  You will be charged a fee for the
  money.  The cost will be between 1 and 5 of the
  amount of cash you take.  This amount will also
  be added to your balance, and you will be charged
  interest on it.  Many credit cards charge a
  higher interest rate for cash advances.

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Do Not Skip Payments

• Payment history is 35 of your FICO score, and
  missing payments will cause your credit score to
  drop. The category of payment history is the most
  significant part of your FICO score.  When
  payments are missed, you will also be charged a
  late fee, and the balance will increase.  Again,
  I will go back to budgeting and reviewing your
  spending habits to keep this from happening. 
  Make sure you are setting aside enough money to
  cover your monthly expenses.

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Do Not Over Charge on Your Credit Card Just to
Get Reward Points

• There is nothing better than getting free items,
  so there is a temptation to overuse credit cards
  to get as many rewards points as possible.  The
  problem is that many people do not realize just
  how much has been charged on the credit card
  until the bill arrives.  It is important that if
  you are going to use your cards for reward
  points, you have the money saved to cover your
  charges.  Otherwise, the points end up costing
  you money due to the interest you will have to
  pay for the items on your credit card. 

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Do Not Co-sign for Someone

• Many of my clients have co-signed for someone,
  and it ends up hurting their credit score.  When
  you co-sign, you are responsible for the debt if
  the other person does not pay.  If they are late
  on their payments, the late payment history will
  be reported on your credit report and hurt your
  credit score.  It is easier just to avoid the
  problems of co-signing for someone else.

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• Avoid these Credit Mistakes
• If you avoid the credit mistakes, your credit
  score will continue to improve.  It will take
  some effort on your part, but in the long run, it
  will be worth it when you have excellent credit. 
  Your great credit score will allow you to obtain
  a mortgage, car loan, and lower interest rates on
  credit cards.
• Credit Questions
• If you have questions on how to improve your
  credit score, feel free to reach out.  Give us a
  call at 360-326-2460.  We are here to help you
  improve your credit score.

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Contact us

• Address - 3409 Chandler Pkwy Bellingham, WA 98226
  
• Phone -  360-312-7164
• Email- info_at_whatcomcreditrestoration.com
• Website - https//whatcomcreditrestoration.com/