Every consumer must think about maintaining a good credit history. But maintaining good credit may not always be so easy. In this article, let’s discuss the factors that can lead you to bad credit and how you can avoid them:

Occasional Late Payments. You final FICO score is based upon 15% payment history. Have you been prompt in paying your bills? Or were you often delayed submitting payments? Even occasional late payments can badly affect your credit score so pay attention.

Avoid high credit-to-debt ratio. Any financial expert would agree that using more than 30% to 40% of your credit limit can be damaging. Even a low interest credit card should be used to the fullest. If you do, you could be putting a burden to your credit-to-debt ration.

Charge Offs. A record of charge-off shows that there have been past due debt sin your account. Even if your lender stops debt collection, it can report charge-off to the credit bureaus. Other lenders can see this as a warning and may automatically decline your credit application based on your credit report.

Multiple credit report inquiries. Multiple subsequent inquiries on your report from credit card companies or lending companies can also send a negative impression. A creditor may doubt your intentions as to why you’re trying to open too many credit card accounts or if you can manage multiple accounts and still keep up with your payments.

False charges and erroneous information. Have you checked your credit report for possible errors or wrong information? You have the right to dispute errors and request for a change. Checking your report at least twice a year will help you avoid the possibility of a low score resulting from incorrect charges. Don’t be a victim of ID theft and bad credit. Obtain a copy of your report from the three credit reporting agencies and exercise your right as consumer.

About the Author

Melanie Mathis is a credit analyst and an assistant writer of Liz Roberts for 8 years. She has been participating in the programs of NHBS, Inc such as their continuous effort in giving out Free Credit Repair and Building Ebook. NHBS also has a list of recommended bad credit cards.
Copyright 2010.

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