Common Credit Mistakes - That affect your Credit Score

Common Credit Mistakes - That affect your Credit Score
Your Credit Score could be affected by little mistakes made
on your part. These mistakes are made all the time, and
most don't realize the impact on your credit report and
credit score. We have seen these common problems quite
often, even though you are providing help for a family
member or friend.

Co-signing for loans:

One of the most common credit mistake is co-signing on a
loan for friends and family members that don't pay there
bills. Yes you thought you were helping someone out, but in
return hurt your personal credit. Over the years we have
seen more and more people helping out other people with
loans, and there credit report is littered with late
payments. The result is sorry we cannot help you with the
loan you are applying for because your credit score is too
low. Late payments will drop your credit score 100 points.
So if you had a 700 FICO score, now you have a 600 FICO
score. So don't co-sign for someone else. They need to
learn how to establish credit on there own.

Closing Credit Card Accounts:

Fair Isaac Corporation does not recommend closing out
credit cards, especially if the card is in good standing.
Once you close out a card that is a good revolving line of
credit, you just dropped your scores. This credit was
reporting in good standing with a credit limit, the credit
limit is a part of your credit score. So if you close it,
you score will drop due to good credit being removed.

No Credit Cards will hurt your Score:

If you thought it was ok to not have any credit cards, you
are wrong. Fair Isaac recommends having credit cards, but
using them responsibly.

High Credit Card Balances:

High credit card balances will lower your credit score as
well. According to Fair Isaac your balance should not be
more than 30% of credit limit. The lower your balance is
the higher your credit score will be. This is the quickest
way to increase your credit scores.

Don't give up:

Maybe you have made some mistakes, and now you are on the
road to recovery. Remember your credit is just a snapshot
of your credit during a particular time. You can always
improve your credit by paying down your balances, and being
on-time with your payments to creditors.

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About the Author: Mike Clover is the owner of
http://www.my720fico.com . My720fico.com is one of the most
unique on-line resources for free credit score reports,
Internet identity theft software, secure credit cards, and
a BlOG with a wealth of personal credit information. The
information within this website is written by professionals
that know about credit, and what determines ones credit
worthiness.