3 mistakes you might not realize could hurt your credit

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You may know that making late payments or racking up high balances on multiple credit cards can lead to bad credit. But there are several lesser-known mistakes you can make that can have a real impact, too.

In order to build and maintain good credit, you have to be proactive. Here’s how to solve three surprising problems that can lower your score.

1. Don’t create credit early

2. Not having enough credit cards

Your use of credit rate, or how much credit you use versus the credit amount is available to you, is the second most important factor when determining your credit score. This is why having a few credit cards works in your favor.

“It can actually help to have more cards open because you have more credit available to you. [and] you have a longer history, as long as you don’t have big sales, ”says Rossman.

On average, people have two to three credit cards, depending on Creditkarma.com. Rossman says most people no need for more than that.

It can actually help to have more cards open, because you have more credit available to you, your history is longer, as long as you don’t accumulate big balances on that card.

Ted rossman

Bank rate analyst

3. Ignore mistakes on your credit report

Your credit score is based on the information on your credit report, and it is not always accurate: One in four American adults has an error on their credit report that could affect their score, according to a 2013 study conducted by the Federal Trade Commission.

Even a small difference in your score might prevent you from getting the best price on a mortgage, credit card, or other loan – and costing you thousands of dollars. That’s why it’s helpful to check the accuracy of your credit report at least once a year, says Rossman.

“Check your credit report: you can get it for free at Annualcreditreport.com“, says Rossman.” You can get it once a year from each of the three major credit bureaus. “

The Fair Credit Reporting Act gives consumers the right to report and dispute any credit report error, but it can take months to track the process and see the results in your score. That’s why it’s important to review your reports and eliminate errors well before making big moves that depend on your score, like app. for a loan or a rental a flat.

The article 3 mistakes you might not realize could hurt your credit score originally appeared on Grow by Acorns + CNBC.

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