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Lenders, utility companies and even employers are considering consumer credit reports and data provided by credit bureaus more than ever before. Even world governments (e.g. Greece, Italy, France, and the United States) are having their credit ratings scrutinized.
Keeping your credit in tip-top shape is very important.
The scary thing is credit can be tarnished if not closely monitored. The simplest mistakes, especially as you are improving your credit, can set you back 10 to 20 points.
Let's take a look at a few common credit mistakes I hear people making over-and-over.
1. Closing Credit Card Accounts
This is one of the biggies. Only in unique circumstances should you ever close an old credit account.
There's a temptation to close old credit cards you're no longer using. In fact, logic even seems to dictate that unused credit cards laying around are an unnecessary temptation. Unfortunately, ridding yourself of this temptation, depending on the depth of your credit history, could hit your credit score pretty hard.
Why is this? Payment history is one of the biggest factors in your credit score (about 35 percent). The length of that credit history is a big part of that measurement.
When you close a credit card, the date of last activity locks in and in seven years, the history you've built up on that card may disappear. This may lower your average credit history, particularly if the card was one of your oldest accounts, which may take a toll on your credit score.
So if you're paying off debt, celebrate your victory. Maybe even cut it up, but don't close it.
2. Missing Payments
This should be a no brainer. Still, many folks get sloppy and miss payments by a few days here and
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