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How to Hurt a Credit Score

Good credit is one of the most important things in life. Good credit allows us to purchase a car at a low interest rate. Good credit helps us get into our dream home. Good credit is there to help us when financial times get rough. If all of these are true, why are so many people abusing their credit? Could it be sheer carelessness, or the lack of knowledge on how a good credit can do so much to help finance life situations? Many people may be hurting their credit without realizing it. Here’s your credit lesson for the day with help from this Sugar Land small business attorney:

Gotta Pay Those Bills, Bills, Bills…

The number one mistake most people make when it comes to their credit is not paying their bills on time, or at all. The vast majority of online credit card accounts now offer a reminder feature which sends a reminder via text or email to pay the bill. Search for this set-up option upon logging into the online credit card account if it hasn’t been set up already. Keeping a calendar is another smart way to keep up with when payments are due. It doesn’t matter if it’s a phone’s calendar or a physical calendar, it’s ultimately a great way to keep up with what is due next. If not paying on time is a budgeting issue, it’s time to sit down and add up how much monthly bills cost. Plan on putting X amount of money aside to pay monthly bills before spending money on frivolous items.

How High is The Credit Card Balance?

Credit isn’t only measured in payments. It’s also measured depending on how much debt is owed versus how much total credit is available. The higher the debt that is owed against the total line of credit, the worse the credit score will be. Maxing out credit cards is another way to get a low credit score, as does closing a line of credit with money still owed on it. Talking to credit card companies before closing any cards with debt owed can sometimes lead to the credit company striking a better payment deal to get the card paid off before closing it.

Don’t Close Those Old Credit Cards!

Even with great credit, closing an old credit card with no debt owed can seriously hurt a credit score. When closing old accounts, the entire history of that card gets thrown away, thus making the credit history shorter. The shorter the credit history, the worse the credit score is going to look because there isn’t as much good credit displayed as there once was. If older cards are no longer wanted for purchases, keep them safely stored away in a safe.

Same Person, Different Names

Not notifying creditors of a name change (after getting married, for instance) can cause a serious headache. Some financial reports are tracked through social security numbers, but that’s not the case for all of the files that make up a credit history. Notifying creditors of a name change can ensure that a former name is linked to a current name, thus boosting credit ratings.

Keep Tabs on Accounts

It’s surprising how often account discrepancies happen. Keeping a close eye on account transactions allows for a quick reaction to what could be a bad financial situation. Keeping receipts until charges are posted to the online account is another smart way to keep track of purchases. Always take the customer copy receipt at restaurants with the tip and total filled in. Keeping track of accounts will also make spending habits more apparent, which might help to reduce overall spending.

Now is the time to take charge of credit scores for a better future. For more tips on how to boost credit scores, check out this website. For financial issues that require legal help, call a Sugar Land consumer protection lawyer or a Sugar Land commercial credit lawyer, such as The Law Office of Henry Jakob. Let’s work together to get back to a healthy credit score.