Knowing how to avoid bad credit score should be a major task of cardholders. Each credit move you make from the opening of your first account will either move you to good or bad credit. A bad Credit can be avoided by making the right choices with credit and other financial accounts.
How to avoid Bad Credit Score, Pay Your Bill Regularly
A single late payment can drop your credit score several points and constant late payments can lead to the worse like foreclosures, repossession, collections, and charge offs. Payment of card bill is one thing that must be done every month. Late payment is a huge factor that affects Credit card scores.
Know Which Bills Report to the Credit Bureau
There are months that you are cash straps and you can’t pay up all your bills. You may have to pay off some bills and skip others. Avoiding a bad credit score means you must stay accurate on your bill payment and all your bill on your credit report – credit cards, Loans, mortgage etc. It does not mean that you should ignore your other bills, any bill left unpaid will affect your credit. If you skip a bill have a concrete plan for getting to make up.
How to avoid Bad Credit Score, Don’t Take on Too much Debt
The level of your debts is another big factor that affects your credit score. The number of debt you have can also affect your payment habits. Owing much debt can make it hard to meet up with your monthly payments causing you to miss payments.
How to avoid Bad Credit Score, Be On the Watch
Know the signs of having too much debt and reduce your credit card spending. Credit scores do not only consider the amount of debt but also how your credit card balance compared to your credit limits (credit utilization).
Keep your credit card balances low and make your regular loan payments to reduce the amount of debt you have.
Manage Your Money Well
If you’re not good with money management, you’re likely going to get into trouble making your credit and loan payments. This will bring you into bad credit. Being good with money helps you in your financial management, it keeps out of debt, help protect your credit score and allows you to achieve your financial goals.
How to avoid Bad Credit Score, Minimize Your Credit Card Applications
For each credit card application you apply for it adds an inquiry to your credit report. These inquiries are 10% of your credit score and can be g about drop on your points based on the information on your credit report. Also, having plenty credit card applicationsmean much credit cards, lots of balances and lots of payment to met up with.
Build a Healthy Saving Lifestyle
Having a healthy saving lifestyle does not build a credit score. Bank balances are not factored into your credit score, so saving money will not impact your credit score. Having money saved up to assist you in avoiding some financial issues that can lead to bad credit scores. Such as paying off debts and making other payments is good.
Avoid Making New Expenses
Think before making new expenses each month. We keep upgrading and adding new bills without considering, how it will affect our ability to pay all our other expenses. Take into consideration, how the new purchase will impact your monthly budget if you’re going for one.