by Nigel Hilton

Our credit score is so important these days. It’ll affect your ability to borrow money and if you’ve got a bad credit score it could really trip you up in the future when you’re trying to buy a house or get a car on finance. But the world of credit is confusing and a lot of people don’t really know what they’re doing so they end up making basic mistakes that have a negative effect on their credit score. Even if you’re being sensible with money, you could still be damaging your score. That’s why it’s so important to avoid these common credit mistakes.

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Not Checking The Report

You don’t know whether you’re in trouble if you don’t check your credit report in the first place. A lot of people just check the score itself and don’t bother reading the full report. It doesn’t exactly make for exciting reading but it’s important that you do it. It’s not enough to know whether the score has gone up or down, you need to know exactly why and what you’re doing right (or wrong if it’s gone down). Everybody can get a free credit report these days so there’s no excuse for not checking it. If you neglect it, you won’t be able to catch any problems until it’s too late and your score is in the gutter.

Not Challenging The Report

Credit reports are quite complicated documents and the process of working out the score is tricky. So tricky, in fact, that the experts often make big mistakes on your credit report. If that happens, your score will plummet, even though you haven’t actually done anything. That’s why it’s important to read the report in the first place and challenge it if there is anything that you think is wrong. You don’t need to do this yourself, you can get a law firm to help you remove any incorrect items from the report. Check out these Lexington Law firm credit repair reviews to get a better idea of the services they offer. They can help you to fix the report and then clean up your score afterward.

Closing Old Credit Card Accounts

When you’ve finally cleared a credit card debt, it’s probably tempting to chop the card up and close the account immediately. Surely, not having a credit card is better for your credit score? Actually, as silly as it sounds, having more credit cards could actually help your credit score as long as you don’t owe money on them. Your available credit is one of the things they take into account when they’re calculating the score so it’s actually better if you leave the account open and just don’t spend anything on the card again.

Co-Signing Loans

It’s a difficult situation to be in when somebody close to you comes to you and asks you to co-sign a loan for them but you should avoid it. Even though it’s hard to say no, it’s for the best. They probably need you to because they’re borrowing a lot of money or they have a poor credit score. Either way, the chance of them not paying it back is quite high and when that happens, your credit score is going to suffer.

Avoid these common credit mistakes and your score will be looking healthier in no time.