When it comes to your credit score, knowing what mistakes will hurt your credit score is helpful. This knowledge will help you avoid making these mistakes with your score. Here are the top three mistakes people make that hurt their credit scores.
The biggest mistake to make regarding your credit score is not paying your bills on time. This will negatively impact your credit score the most. When credit scores are calculated, they weigh certain areas more than others. On-time payments are the highest-weighted category. If you don’t pay your bills on time, your score will drop very quickly.
The second mistake people make when it comes to credit has a high credit card balance. While credit cards offer a maximum amount you can borrow on that card, it does not mean you have to carry that much as a balance. The second highest weighted credit score category is your credit utilization ratio. A lower ratio will give you a higher score. Conversely, if you carry a large balance, it will provide you with a high ratio which will negatively impact your score.
The third mistake is not keeping up with your credit report and reporting mistakes. It is so easy to be a victim of identity theft. Because of this, it’s crucial to always look at your credit report. You can get a full report once a year for free and use apps to check your score every month. If your score is low and you haven’t checked your report, you may have a mistake on your report that is impacting your score. You can get these fixed which can help improve your score.
If you are looking for three easy ways to increase your credit score, consider these three common mistakes to see if you are making them. If you are, you can quickly correct them by implementing good credit habits. In a few months, you can start to see your score increase.