Not to Do Check List

Many people don’t realize that simple credit card mistakes can damage your credit and make you lose out on great opportunities.

Don’t let your credit score negatively affect your life — whether that means missing out on your dream job or the lowest interest rates when refinancing student loans.


Avoid these seven most common credit mistakes and protect your financial future for years to come.

  1. Paying bills late
    One of the biggest factors in determining your credit score is your past payment history. While one or two late payments on your credit cards, loans, or other important obligations over a long period of time may not significantly damage your credit record, making a habit (or mistake) of it can count against you.
  2. Applying for Store Credit Cards
    It can be tempting to fill out that little application form to save on your purchase in the store that day. In fact, you might assume taking advantage of these savings are a good financial habit. But did you know that just by applying, you are opening a line of inquiry on your credit that could negatively affect your score? The more “hard inquiries” on your credit, particularly within a six- to 12-month window, the more you damage your score.
  3. Keeping debt levels too high. If you “max out” or already owe a lot of money on your credit cards, potential creditors may question your ability to repay. Creditors also use this information to evaluate loan approval or interest rate charges (higher interest rates are used to compensate for higher risk).
  4. Cosigning for a Loan
    Let’s be blunt: co-signing on a loan is a bad idea. You’re trying to help your child, aunt, cousin, or best friend from childhood. But if they fail to make a payment, you’re stuck footing the bill, and you have no recourse in court. And if you refuse to make payments, you’ll damage your credit score — just as much as you would if you took out that loan yourself.
  5. Not alerting creditors if you’ve moved or changed names
    If you move between apartments frequently and don’t change your address on bills, you run the risk of not receiving bills on time and suffering late payments as a result. Not notifying creditors of a name change could result in your credit report not accurately reflecting the credit you’ve worked to build.
  6. Closing credit accounts
    Did you know that closing your credit card accounts can hurt your credit score? Closing your account will lower your available credit; if you have any other outstanding debt, such as another credit card, a car loan, or student loans, your debt-to-credit ratio will increase — bad news for your score. As tempting as it is to say goodbye to that card forever, it’s in your best interest to keep the account open.
  7. Not periodically checking your credit report. Many people never look into their credit report until they’ve been denied for a loan or credit. Inaccurate or missing information in your credit report could raise your borrowing costs or cause delays when you’re in a rush to make a major purchase, like a car.