Bad FICO Scores Will Damage Your Credit Report Because of These 14 Credit Mistakes
There are a wide variety of myths floating around about what you should and shouldn’t do to improve your credit reports and credit scores.
Your credit score is important for obtaining credit. Your credit score is important to know, whether you need a new credit card, an auto loan, or a mortgage. Lenders use your credit scores to decide whether you are a good credit risk. If you have a high credit score, you are more likely to obtain the best rates.
For a thorough review of your credit profile, you need to check with all three major credit reporting agencies Equifax, Experian, and TransUnion. Information can vary between the three CRA’s and it’s important to make sure each has accurate and up-to-date information regarding your credit history.
It is already reported that over 80% of all credit reports have errors, so to help keep your credit report blemish free, follow the tips we have provided below.
1. Using expensive or undesirable types of credit costs too much and is negatively scored.
2. Accumulating too many lines of credit or too many credit cards causes credit report remarks like “too much consumer credit.”
3. Only paying the minimum due keeps balances too high.
4. Being maxed out on any credit card or line of credit causes deep drops in scores.
5. Taking cash advances costs higher interest and extra fees.
6. Exceeding limit and having to pay over-limit fees is a negative with creditors and causes “high proportional amounts owed” remarks on credit reports and subtracts credit score points.
7. Paying a day or more late causes unnecessary late fees and often increases interest rates.
8. Charging more than you can afford causes a snowball effect of amassing debt with no easy way to pay it off.
9. Letting someone else use your credit, such as co-signing a loan, raises your debt-to-income ratio and possibly adds “too many consumer accounts” on your credit report, which lowers your score.
10. Ignoring credit problems causes unnecessary negative impact. Talk to creditors before being late and make arrangements. This action heads off negative reporting to credit bureaus.
11. Failure to report address changes to creditors causes misplaced bills and late payments.
12. Using partial name, different names, initials instead of whole name, or forgetting “Sr.” or “Jr.” causes mix-ups. Use your full legal name to protect you from confusion with similarly named borrowers.
13. Failure to report name changes to creditors also causes confusion.
14. Not checking credit report frequently is one of the most common mistakes consumers make.
There is no way to fix your credit overnight no matter what the advertisements claim. The bottom line is that if you are faced with difficult financial situation you must first look to fix the problem yourself through using basic budgeting guidelines.
Tags: Bad FICO Scores, Budgeting Guidelines, Co-Signing a Loan, CRA, Credit Mistakes, Credit Profile, Credit Score, Creditors, Equifax, Experian, FICO Score, Improve Your Credit Report, Paying The Minimum Due, Too Many Credit Cards, TransUnion