Although most of us know about the most important components that make up our credit scores, there are other components that can prove surprising from time to time. Be sure to read up on the components that make up credit scores, because knowing about them will also help you avoid making bad credit moves.
Here are some common examples of activities that can end up damaging your credit rating:
* If you realize that you are going to encounter difficulties with making your monthly payments, don’t sit on the information until the payments are long past due and the collectors have started harassing you through the phone. Take the time to speak with your creditors both to inform them about your circumstances and to see if there is anything that you can do about your situation.
* Don’t take out more money than what you need. Not only does having more outstanding debt limit your financial options in the future, but too much outstanding debt can also result in damage to your credit rating. Furthermore, excess debt relative to income is dangerous because a sudden disaster can push you past the edge of insolvency.
* If you have been struggling to manage your credit card debt but have finally managed to finish paying down the outstanding balances, don’t cancel the cards that have been paid off. Part of the calculation of your credit score is based on the length of your credit history. Each time you cancel a credit card that has been paid off, you are also discarding the credit history attached to the card.
If you find yourself with sub-par credit, don’t worry as there are plenty of ways to fix your credit score.