Having good credit is essential for a number of aspects of your life, ranging from the interest rate on a car loan or credit card to background checks for employment. Poor credit can cost you more money when buying a home due a higher interest rate over the course of your home loan. Fortunately, with proper care and attention paid to your finances, it is possible to maintain a good credit rating.
Here are six factors that could damage your credit score:
Not paying your bills on time - Bills not paid within 30 days can be reported to the credit bureaus.
Utilizing all of your available credit on credit cards - It is important to not max out your credit cards without a plan to pay them off.
Not having a diverse mix of credit - Having different types of credit, such as car loans and revolving credit, could help improve your score.
Applying for too much credit - Multiple applications for credit cards in a short period of time can be a bad sign.
Not using credit at all - You must show that you can responsibly use and manage credit in order to maintain a good score.
Having a good credit score can make the difference between having your loan accepted or declined, and will determine your interest rate. Poor credit is preventable if you pay attention to the above mentioned criteria, so be sure to stay on top of your finances and credit to ensure that your loan is approved and that you receive the best interest rate available.
PS: Creating and sticking to a monthly budget can make managing your finances easy and automatic.
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