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How to Avoid Hurting Your Credit Score

When it comes to your credit score, not only is it really the first impression to a potential lender that can decide your ultimate fate for approval or denial, but it’s also the determining factor in the monthly payment, of which the better the credit score, the better the interest rate, providing you with the lowest monthly payment.  By ensuring you stick to a few key factors, you can avoid hurting your credit score and striving for improvement month over month and watching the savings add up.

Review the Full Report

You may assume you have ‘perfect’ credit, but until you review the full report to make sure that all account information is up to date and accurate, you can never be sure.  With so much fraud these days whether it’s having your card information snapped while you leave your card out paying a bill or even having a retailer’s computer system breached, you can never be careful so it’s good to review the full report once a year.  When it comes to viewing the score, you can actually look to your monthly credit card statement to see, and compare month over month to ensure it continues on the rise.

Pay Your Bills on Time

While this should be common sense, accidents still can happen and you don’t want to have to pay the price.  Sure, missing a day or two can cause a late fee or at the worst, an interest rate spike, but it’s when you become thirty days late is when the credit bureaus are notified and your credit score can take a drastic hit.  By scheduling payments in advance, or at least even on the due date, you can make sure that a costly accident does not occur, because lenders your credit report will not forgive an accident.

Don’t Overextend Yourself

Sinking into credit card debt can actually happen pretty quickly.  As you continue to charge, and the balance carries over to the next statement with interest, if you’re not able to pay off, interest continues to get charged and the balance will continue to rise until you can make significant dents into the total.  Since there really is no stop for using a credit card, I guess until you hit your credit limit, sticking to a budget is a great way to ensure you’re only spending what is allocated for areas such as monthly bills, food, gas, and even spending money.

Leave Zero Balance Accounts Open

Getting out of credit card debt if you have had issues in the past is a great accomplishment, one that you may even want to take the drastic move to close your account once the balance gets down to zero.  While that will certainly curb any spending, closing the account can actually lower your credit score since it removes that available credit, especially if you have balances on other cards.  If you want to avoid using, just simply cut up the card but keep the account open, and that way you don’t want to worry about getting yourself into previous credit balance mistakes.

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