improving credit

Simple Mistakes That Affecty Credit Score

Keeping a healthy credit score is something that you will have to do consciously. Simple mistakes, such as the following, will often lead to a drop in the score. This is unfortunate, because these mistakes are completely avoidable.

1. Don’t miss a payment. The payment history takes up 35 percent of the credit score. Missing a payment can make big negative impact. In the past, lenders reported late payments only after 30 days. But with the unfortunate impact of the credit crunch, lenders have now resorted to reporting accounts that are even a couple of days late in paying.

2. Don’t max out. Going on a shopping spree is not the best of ideas if you end up maxing out your credit card. About 30 percent of your credit score depends on the balance you maintain between the percentage of debt and the available credit. Maintaining a healthy 30 percent is advisable.

3. Don’t get more cards. Too many credit cards also show up badly on your credit score. Ideally your credit mix should consist of only two credit cards, a car loan, a mortgage and some student loans. Even if you do want to get a few new cards, don’t get them all at once. Keep a good time span between each request and you will be alright.

4. Don’t close the old accounts. Getting rid of old credit card accounts is actually detrimental. This will wipe out part of your credit history and also affect your available credit.