Sometimes I need to be reminded of mistakes I’ve made so I can move forward. Speaking of which, our friends over at time.com have outlined 7 simple mistakes that can destroy your credit score. While you might be aware of them all, it’s sometimes good to have that simple refresher course as we offer here on this Wealth Wednesday. This is particularly helpful if we boomer males face some financial challenges, as I have, in our third acts.
7 Mistakes that Can Destroy Your Credit Score
We all make mistakes. But when it comes to our credit, we need to be especially careful because that one slip-up can damage our credit for years to come. Here are seven mistakes that can put your credit on a downward spiral.
1. You forget to make a payment: Forgot about that bill? Your oversight can cost you a lot more than a late fee, it can also have a significant negative impact on your credit score. It feels very unfair to be saddled with a seven-year black mark on your credit reports for a single mistake, but it happens.
2. A medical bill slips through the cracks: Maybe you got a medical bill but thought your
insurance was going to take care of it. Or maybe you never did get the bill. Either way, a medical bill that winds up on your credit report can wreak havoc on your score.
3. You refuse to pay a bill “on principal”: Maybe you felt you were overcharged on a bill. Or you’re ticked off because you don’t feel a dentist/doctor/mechanic or other professional did a good job. Perhaps you had a run in with your landlord. Whatever the reason, you refuse to pay a bill. While it may feel good to stand your ground, if the provider you won’t pay reports to the credit reporting agencies, or turns the bill over to collections, you may not feel the same way when that same item keeps hurting your ability to get credit at a decent rate in the future.
4. You get talked into co-signing: Most people who co-sign do so out of a sense of obligation (think kid’s or grandkid’s student loans) or kindness (think best friend’s car loan). And many times it’s not a problem. But we’ve heard so many co-signing horror stories in the Credit.com blog comments that we know things don’t always go as planned. Even if the bills are paid on time, the additional debt may affect the co-signer’s credit scores or debt-to-income ratio, and make it impossible to get a loan themselves.
5. You max out a credit card: Maxing out a credit card could cost you as many as 45 points (sometimes more), according to FICO, even if the amount you owe is small. It’s not so much the amount that matters, as how close your balance puts you to your credit limit. 
6. You close out all your old accounts: While closing an unused account you really don’t want (or that charges you an annual fee) every once in a while may be fine, resist the urge to close all the ones you don’t use. You’re more likely to see your credit scores go down than up if you do.
7. You assume everything’s fine: This is perhaps one of the biggest mistakes we tend to make with our credit. I’ve been guilty of it, too. Because you pay your bills on time, you assume your credit is fine. In a survey by Credit.com earlier this year, 29% of those who had not checked their credit reports cited that as a reason why. (Or maybe you know it’s not good, and you’d just rather not take a look.) But of those who did review their reports, 21% found a mistake, 9% discovered a late payment they didn’t know about, and one in 10 found a collection account they weren’t aware of.
To read the entire time.com post go here. And let us know what you think. Have you experienced any of the above? How did you fix things? Share with us below.
Do well.
