any consumers know that there are mistakes, you need to
they have a credit score get them corrected. The truth is
but they may not know what one in four credit reports
the score is. As well, many contain errors that are serious
consumers know that there are enough to hurt a consumer's
some actions or inactions that chances of getting loan.
they can take that will help or
FICO credit scores are
hurt their score. Again, they calculated from five categories
know the broad picture, but not listed on credit reports: your
the details. Here are some of the payment history, amount of money
things that consumers do that all owed, length of credit history,
but massacres their credit score. new credit obtained, and types of
First of all, consumers should credit used.
understand that lenders and
The second thing many
creditors are constantly updating consumers do to hurt themselves
the information that is on a is to pay late. Late payments are
person's credit report. This is recorded on your report and they
one of the most important reasons usually stay there for seven
why consumers must keep an eye years. In general, payment
out for mistakes or omissions on history accounts for 35 percent
their reports. Credit reports are of the credit score.
not static.
The third thing that can cause
Some actions or inactions that problems is simply having too
can kill a credit score many credit inquiries. A credit
follow:
inquiry occurs whenever someone
Not examining credit reports wants to look at your credit
often enough is one of the most file.
common problems that consumers
Rate shopping for a car loan,
face. These reports are used to a home mortgage, or a credit card
determine your credit score. If can damage your credit if it is
not done properly. Lenders you relative to the amount of
approach ask credit bureaus for a available credit you have.
copy of your report for review. Closing an account will cause
This request shows up on the your ratio to go up because
credit report as a hard inquiry, closing the account drops your
which affects your credit total available credit while not
score. reducing the amount of credit you
Minimize the potential damage are using.
by rate shopping within a short
Consumers should be very aware
period of time, such as a couple of the amount of debt that they
of weeks. According to have on the books. Amounts owed
myfico.com, "Multiple inquiries will make up nearly 30 percent of
from auto or mortgage lenders in the score. The more you owe, the
a short period of time are lower your score will be.
typically seen as one inquiry and
Lastly, consumers should be
have little impact on your careful about cosigning for
score."
another person. If the other
Believe it or not, closing person does not pay on time you
your old accounts can damage your will most likely see a reduction
score because, in essence, doing in your credit score.
so may shorten your credit
Keep track of what is on your
history. Credit history makes up credit reports and you will have
about 15 percent of the score, so done a lot to maximize your
you do not want to shorten it credit score.
unless it is absolutely
necessary.
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Article Tags: consumers, credit, score
