Your credit score is one of the most important things in your life. It determines how eligible you are for things such as loans and your overall creditworthiness. For instance, a good score offers you the benefit of enjoying lower interest rates on loans.
To put it simply, having a high credit score can help you save money. It could possibly even make you rich.
However, it is quite easy for one to bring down his/her credit score. What’s worse is that it is often done out of sheer ignorance.
Credit scores are calculated using complex algorithms and very few people are actually aware of how much their credit score is. But, keeping your credit score high doesn’t necessarily require you to be good at numbers. All you have to do is inculcate a few positive financial habits.
Speaking of financial habits, here are a few that can bring down your credit score.
Around 35% of a person’s credit score is determined by bill payments. If you’re someone who habitually misses or delays bill payments, you could be looking at poor credit scores. To make things worse, such habits will make it easy for creditors to increase your interest rates and even charge you with penalty fees.
You basically end up paying twice, unnecessarily.
If you notice an increase in your balances without being offered a new credit line, there’s a chance that your credit score might drop. In fact, this is very true for those who have such balances on their credit card; balances that aren’t going to be paid for right away.
Around 30% of your credit score is determined by your extended credit use. In other words, keep an eye on your extended credit use and make sure your balances are kept at a minimum.
Another major mistake that can affect your credit score is maxing out your credit card. Just because there is a certain limit on your card does not mean you have to meet that limit. Ideally, your balance shouldn’t cross 30% of the set limit.
To put it simply, if you have a $30,000 limit, you should not spend more than $9000.
Having significant balance on your credit card will upset your credit score.
There are other ways to make the most of our credit card. For example, you can pay off your balance before the report reaches the credit bureau. That way you will have a lower balance showing up when the report reaches them.
If you’ve already made the above mentioned mistakes and lowered your credit score, do not worry. There is a way out. All you need to do is sign up for a reliable credit repair service. There are trustworthy firms that offer credit repair in Phoenix and they can make sure your credit scores look better than they normally do.
For more information, get in touch with Lexington Law, CreditRepair.com, or Sky Blue Credit.