Most people and businesses can hardly survive without credit facilities to keep their normal day-to-day life or operations, respectively, running smoothly. Credit enables you to spend money you do not currently have and to repay it later in manageable installments, or after receiving profits so your business is not affected. The amount of credit that you can access is largely dependent on your credit score, among other factors. A good credit score is crucial, as it gives lenders confidence that you will repay the loan. Nevertheless, your credit score can be eroded by some things—some of which you can avoid, while others may be beyond you. For example, you could miss repaying your mortgage payment after losing your job, which is something you cannot control. All the same, most common credit blunders are things you can escape. Below are some credit mistakes you have no excuse for committing:
Failing to pay your obligations on time
Although you have all the money you require to repay your loans, you may forget to pay some of your bills when they are due, possibly for lack of proper tracking. Late payment, say by 30 days, can easily spoil your credit score. Your bank or lender may not report you to the credit bureau for being late to pay your loan by a few days, but they will impose punitive late payment charges. You can avoid late payment, especially where your obligations are spaced out, by using banks’ automatic payment options, so the minimum amounts are paid by the due date. Also, be on the lookout for reminder messages and emails sent by most lenders.
You cannot afford to have a bad credit score due to late payments. In fact, you should even look at how to improve it at https://www.boostcredit101.com/ and stand better chances to build your credit score.
Putting your bills away without scrutinizing them
It is a fact that going through your bills to find any wrong charges or mistakes is boring, but it would be a big mistake to toss them away or file them without combing through them. You can miss an opportunity to question a wrong charge from a vendor or to pay for transactions you did not make. The law offers you the right to dispute incorrect charges within 60 days depending on the nature of the dispute. If you do not carefully read through your bill, how can you dispute or even know that someone stole your card?
Not caring to check your credit scores or reports
Are you aware that you have a right to view your credit reports from the major credit reporting companies—Transunion, Equifax, and Experian—at least once per year, free of charge? Unfortunately, if you do not take advantage of these free chances, you may never be aware of some mistakes or unauthorized accounts that are denting your credit score. Also, you can monitor your credit score through the free credit score services provided by your credit card company.
Putting off credit card bill to settle other loans
According to Transunion, many of those struggling to pay debts prioritize other, bigger loans, like auto loans, over credit card bills, which often leads to late payment of credit card dues. Failing to pay your credit card bills due to tight finances is a big mistake you have no excuse for making. Most cards charge about 2% of your balance or some other low figure, and assuming the amount outstanding on your card is about $1000, you need to only pay $20, quite a small figure that you can settle if you refrain from splurging on pizza and other delicacies.