As we know by now, your credit score is a three digit number that determines how fiscally responsible you are. In this article, I want to help you pin point what you may be doing that’s demolishing your credit. Don’t forget to join this month’s challenge!

Common mistakes that can damage your credit score are:

• Not paying your bills on time. This is the most important factor in your credit score. Lenders want to see that you have a history of making your payments on time. If you miss a payment, it will show up on your credit report and your credit score will take a hit.
• Maxing out your credit cards. Your credit utilization is the amount of credit you are using compared to your total available credit. Lenders prefer to see that you are using less than 30% of your available credit. If you max out your credit cards, it will show up on your credit report and your credit score will take a hit.
• Closing old credit accounts. When you close an old credit account, it can lower your average age of accounts, which is a factor in your credit score. If you have a lot of old credit accounts that you are not using, you can consider keeping them open and just using them occasionally to keep them active.
• Applying for too much credit too often. When you apply for a new credit account, it will show up on your credit report as a hard inquiry. Too many hard inquiries in a short period of time can hurt your credit score. If you are planning on applying for a new loan or credit card, it is best to space out your applications over time.
• Having a history of late payments or defaults. If you have a history of late payments or defaults on your credit report, it will damage your credit score. If you have any late payments or defaults on your credit report, you should try to pay them off as soon as possible and dispute any errors that you see.
• Having too many inquiries on your credit report. When you apply for a new credit account, it will show up on your credit report as an inquiry. Too many inquiries in a short period of time can hurt your credit score. If you are planning on applying for a new loan or credit card, it is best to space out your applications over time.
• Applying for too many loans. When you apply for way too many loans at a time you signal to the bank you make go bankrupt soon. Once you activate a bank’s bankruptcy signals, it makes it extremely hard for you to grow your credit score or get loans in the future. As we know from last week’s article, having a good credit score is imperative for maintaining a good life. ( Especially in America.)

How to Avoid These Mistakes

The best way to avoid these mistakes is to be aware of them and to take steps to prevent them from happening. Here are a few tips:

• Pay your bills on time. This is the most important thing you can do to protect your credit score. Set up automatic payments so that you never miss a payment.
• Keep your credit utilization low. Aim to keep your credit utilization below 30%. If you have a lot of credit available to you, consider using less of it.
• Don’t close old credit accounts. If you have old credit accounts that you are not using, consider keeping them open and just using them occasionally to keep them active.
• Apply for credit responsibly. Only apply for credit when you need it and space out your applications over time.
• Dispute any errors on your credit report. If you see any errors on your credit report, dispute them immediately.

By following these tips, you can avoid making these common mistakes and protect your credit score.

Here are some additional tips for protecting your credit:

• Review your credit report regularly. You can get a free copy of your credit report from each of the three major credit bureaus once per year at annualcreditreport.com.
• Be careful about what information you share online. Don’t give out your personal information to websites that you don’t trust.
• Be wary of scams. There are many scams out there that target people’s credit information. Don’t fall for them.
• Use a credit monitoring service. A credit monitoring service can help you track your credit score and look for any changes.

By following these tips, you can protect your credit and keep your score healthy.