In the credit world we often hear about the things we should to help our credit get better, yet hardly ever do we read about the don’ts of credit. In other words, we need to know the “no nos” we should avoid so our credit doesn’t get impacted in a negative manner. Such common mistakes we might make can cost us many points on our credit scores. We compiled a list that amounts to "The 7 Don’ts Of Credit":
1- DO NOT PAYOFF COLLECTIONS:
Unless you are given a deletion letter by fax or email first. ( you need it in writing before you settle. No Verbal Agreements!! ). Paying off a collection with out a deletion letter will reactivate the account thus staying on your credit report for 7 years. Paying it off also will show a settlement on your credit and may cost you more points on your credit score.
2- DO NOT LET YOUR BALANCES:
On revolving credit accounts exceed 30% of your credit limit. This will show creditors that you can use credit responsibly without overextending yourself. For example, if you have a credit card with a $1000 limit, keep you balance under the $300 mark.
3- DO NOT CLOSE CREDIT CARDS YOU DON’T USE:
As you will be taking away from your revolving available credit which may drop your credit scores. Keep all revolving accounts active within your financial means.
4- DO NOT UNDERESTIMATE THE POWER OF CREDIT CARDS:
You should have a minimum of 3 to 5 revolving credit accounts. Do not open too many credit cards at once. Sometimes too much credit accounts is as bad as no credit.
5- DO NOT PAY YOUR BILLS LATE OR MISS PAYMENTS:
Late or missed payments when reported on your credit reports will drop your credit scores and hurt your credit standing.
6- DO NOT RUN YOUR CREDIT EVERYWHERE
Each credit check may cost you to lose points from your credit score. It is better to refrain from running your credit numerous times.
7- DO NOT OPEN TOO MANY INSTALLMENTS TYPE OF LOANS:
They show up as debt on your credit reports. ( installment loans are: student loans, car loans, home loans and (or) some furniture stores).
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