What are the credit mistakes that you must avoid?

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A credit report is the summary of your credit transactions from the past and present. Therefore, having a check at your report regularly helps in identifying any faults or discrepancies that can affect the overall credit score. A good credit score is a testimony of your good financial health, thus making the borrower eligible for the best offers on instant personal loan and credit cards.

 With various credit options available with borrowers these days, there is a higher possibility that they make a few credit mistakes. The facilities like quick personal loans disbursal, minimal documentation, flexibility in payment tenure, etc. are favorable for customers, however, while applying for a loan, the borrower might fail to pay attention to some of the critical aspects associated with it, calling in rejection of their loan application.

Before we dive into the mistakes that can affect your credit report we would like to present a fact that you might not be aware of. If you are looking for a job with a reputed firm, you may want to know that employers can conduct credit checks as part of the hiring process. So it is important to demonstrate financial responsibility.

A Few Mistakes to Avoid NOW!!

If you are making these credit mistakes, you must stop now. It is important to maintain a good credit report in order to maintain your overall financial health. If you are making any of the following mistakes then your credit score is just going to dip and revival will be a tough tour.

Paying the bare minimum

When your credit score is calculated, your financial report plays a huge role which is inclusive of your bill payment history. If you tend to carry forward a higher balance, the interest rates increase. Whenever you find yourself in a pool and fail to pay the full amount of your credit balance, make sure to not just pay the vary minimum amount. Pay as much of the amount as you can.

Delaying the credit payments

We all know how detrimental will this practice be for your credit health. If you go past the last date of paying the credit bills, your credit score takes a huge hit. Therefore, make sure that you stick to a schedule and make payments on your credit bills in time. Set up financial reminders and do things the right way for a better financial report.

Complete utilization of credit limit

No matter how urgent the need might be but exhausting your credit limit should be the last option on your list. Exhausting your credit limit will directly send the indicator that the credit utilization ratio is high which is a serious hit on your credit report. To prevent that, pay your bills in time and eventually ask for an increase in the credit limit.

Applying for multiple credits at the same time

Applying for multiple credits can do more harm than good to your credit report. Especially if it is done in a short period of time. The lenders upon assessment may find it suspicious and decline your credit request eventually. Apply for a loan or credit only when you are in genuine need and make sure to pay off your bills in time for all the credit sources.

Ignoring annual credit report

Your annual credit report is important. It is advisable to have a look at it for there are chances of mistakes. If the mistakes remain in the report for too long, it can have a harmful impact on your credit health. Make sure to skim through your report and inform the bank about discrepancies if you find any.

Some of the things to look at in your report are:

●     Account numbers

●     Any accounts you don’t recognize

●     Inaccurate payment status

●     Information of active and closed accounts

●     Duplicate accounts

●     Incorrect credit limits

●     Old/False delinquencies

 

Additionally, the borrowers must take care of all the credit sources they have and avoid closing the oldest ones for the length of your financial health report will cut down and the utilization ratio will see an increase. Borrowers must report about the stolen or misplaced credit cards well in time for banks to put in actionable efforts.

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