Don’t Be Haunted By Bad Credit Mistakes
Monster movies may sometimes keep kids awake at night yet their parents are more likely to be tossing and turning worrying about making ends meet and dealing with the budgetary boogeyman. This Halloween resolve not to make the kind of mistakes that damage credit scores and haunt you for years.
Don’t be a werewolf about bills: Just like a Werewolf’s full moon, bills come around each month yet, if we are prepared, then the thought of paying them doesn’t have to turn us into monsters. The largest part of your credit score, 35%, is related to your payment history. Make a calendar of when your bills are due and create a spending plan to pay each on time.
Beware of zombie credit card accounts: The total amount owed makes up 30% of your credit score so it is important to pay down your debt. Maxing out your cards or moving debt from one account to another just feeds the debt with interest charges and keeps it alive long after you could have killed it off.
Vampires and credit histories live forever: You may be considering closing some credit accounts that you don't use much anymore. Think twice because the length of your credit history makes up 15% of your credit score. As long as you don’t use them too often, you don’t need to worry about them sucking your budget dry.
Watch out for that wand: With all the free credit card offers around, you don’t need to be a witch or wizard to make new credit accounts appear. Still, new credit accounts for 10% of your score and it is not a good idea to open several new accounts at once.
Who you gonna call? The final part of your credit score, 10%, is based on the type of credit you have such as revolving credit used by credit card companies and secured credit obtained for major purchases such as cars and homes. It’s good to have a mix to avoid getting slimed by a low credit score.
Don’t act like you live in a haunted house: The number one mistake you can make to destroy your credit history is to ignore or hide from problems that may arise. Not answering your phone or opening the mail will not make the problem become invisible and go away.
Invasion of the body snatchers: Identity theft can make a mess out of your life and your credit score. Guard your private information by shredding credit card offers and old financial records and never giving out personal information such as your social security number by writing it on a check or furnishing it to a stranger.
It’s alive!: While your credit history may not actually be alive it does change as time goes by and can get easier to live with or, if you aren’t careful, it can turn into a monster. Keep your eye on it by reviewing your bills and bank statements as soon as they come in, monitoring your credit reports regularly and using credit responsibly.
