Credit Score Mistakes

Don't Ruin your credit score. Avoid making these credit score mistakes.    

#1. Credit Score Mistake: Closing Accounts

Each one of your "open and active" accounts contributes points towards your credit score. You might think of them like players on your team, all of them scoring points for you. Once an account is closed, it is worth zero points. If the account was contributing 20 or 30 points to your scores, those points will dissappear. Your credit score will drop.

#2. Credit Score Mistake: Inactive Accounts

Since only "open and active" accounts contribute points to your score, it is important to make sure your accounts remain active. It is a good practive to use each one of our credit cards and department store charge cards once every six months.

#3. Credit Score Mistake: Past Due or Upside Down Balances

Past due or upside down balances can have a very negative impact on your credit scores. 30% of your FICO score is directly influenced by the balances on your accounts. The worst offense you can make here is an upside dow n or past due balance. The good news is, all you have to do is get current and your scores will rebound.

#4. Credit Score Mistake: High Revolving Debt

High revolving debt can bring your scores down substantially. It is important to keep the balance on your revolving accounts below 50% of the credit limit. If the balance on just one account exceeds 50% of the limit, you will lose points. I've seen people's scores increase over 70 points by paying down a few credit cards.

#5. Credit Score Mistake: Opening an new account (at the wrong time)

Opening a new account is seen as a risk, therefore, your scores will drop temporarily. Once you have established a solid history of payments, the new account will stop hurting your scores and start helping them. It is best to avoid ope ning a new account if you are planning on using your credit for something important within the next 12 months.

Collection Accounts FICO Scores No Credit Scores #1 Rule of Credit Score 5 Factors Influecing Scores Payment History Balances Length of History Types of Credit Inquiries

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