Little Mistakes can Mar your credit score
You might notice a drop on your credit score due to a seemingly small mistake you made. Maybe you forgot to return library books after reading. Making little mistake such as that can mar your credit score.
Small mistakes everyone can make
Making a car rental with your debit card:
If you make a car rental reservation with your debit card, a rental car company might require a credit screening. Screening your credit will impact your score negatively, says the credit agencies.
You will rather save yourself unnecessary credit inquiry by making your reservation with your credit card. You can then pay off the outstanding bill with your debit card when you are done with the car.
After the enaction of the credit industry in 2016, credit bills can only be reported after 180 days. This long waiting period is for credit insurance to apply. Once the bill is settled, a credit reporting company can exclude medication collection. Yet it is better to pay off your debt gradually to avoid harming your credit score.
Failure to pay your taxes:
If you receive a huge bill such as tax from Internal Revenue Services, it is better you pay what you owe because you can never escape even if you run. You must be tracked and failure to respond positively will cause you a great drop on your credit score.
Do not hide, there is virtually any such thing as a hiding place. Simply have a working plan with Internal Revenue Services (IRS) or seek the help of an expert.
Late Utility Payment:
If you have not paid your utility bills, you must receive notices from service providers before you get cut off from service. If you continue in that routine you will be turned over to debt collectors and in turn to Equifax, Experian and TransUnion. These are the major credit reporting companies.
Closing an old credit card account:
Closing an old credit account maybe because of high-interest charges sounds good. However, it reduces your credit score. According to credit experts, closing credit cards is recorded among the most common credit mistakes.
Taking such action can affect your credit utilization ratio. Your credit utilization ratio is the percentage of your available credit you are using. When your ratio is low, it impacts your credit score positively. On the other hand, when it is high, that means you’re credit usage is high and can have a negative impact on your credit score.