Top 3 Mistakes Which Can Mess Up Your Credit

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Checking Credit Card

If you’re an US citizen and own a credit card, we have some bad news for you: your credit scores could rise by 20 points in the near future, due to a number of civil debts and tax liens being removed from public records, says CNBC.

But there’s no need to panic, as there are a couple of things you can do in order to avoid this situation. Specifically, we’re talking about three common mistakes most people make and which can be easily avoided!

Choosing the wrong card

It’s well known that before deciding upon a credit card, you need to do some proper research. Yes, your bank can make a pretty nice offer, but you should know that some other banks can offer more rewards, including travel rewards or even the option to get a cash back credit card.

On the other side, make sure you avoid high interest rates, especially when it come to retail cards, most of them having higher rates than average.

“The fact that credit card offers are constantly changing and have different terms and conditions, signing bonuses, rewards programs and rewards earning rates make it tough for people to find the best cards, suggests Get.com.

Not paying your debt completely

Basically, this is one of the most important factors that contributes to credit score, as it appears in your payment history. This also includes information about how you’ve repaid the credit you have already been extended on credit accounts, as well as details on late or missed payments, public record items and collection information.

The general idea is that card holders should pay as much as possible of their monthly balance. If you have a high balance, though, you must stop spending and pay it down, as it should never exceed 30 percent of the credit limit.

Closing cards the wrong way

Another reason which could make your credit score go down is the way you cancel a credit card. However, if done in a proper way, the damage will be minimal.

The most important is that the longer you’ve had the card, the worse the impact at close. Keep this in mind before closing old accounts and applying for a loan. And make sure your balance is paid in full!

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