This is part one of a two-part series on how to protect your credit. Be sure to check back for the second installment for more tips on how to obtain your best credit score.
The pursuit to obtain excellent credit and an exceptional credit score can certainly be a difficult journey for some, but understanding the common mistakes that can negatively impact a credit score can help you get the number that can make you a worthy candidate to creditors. A person who has a great credit score may save an estimated $100,000 on a mortgage and $6,000 on an auto loan compared with an individual who may have a less than favorable score.
With this in mind, The Huffington Post offers these tips to avoid the seven deadly sins of credit that can adversely affect your credit score:
- Lust: A person who splurges without regard to his or her budget or personal bills may be guilty of this financial sin. By waiting at least 48 hours before you make a purchase you desire, you can combat “product lust” because you’ll be one-third less likely to buy. This is because dopamine, the feel-good neurotransmitter that compels a person to spend, will stop firing in your brain. Also, paying with cash instead of plastic may help because we may be less likely to part with it.
- Sloth: You could miss an error in your credit report if you don’t check it regularly, so be sure to check your credit report regularly for any mistakes that may impact your credit score. Consumers are entitled to one free credit report per year from each of the three major credit bureaus, which are Equifax, Experian, and the TransUnion. Verify your personal information, such as your name and social security number, and double-check each loan, credit card, balance, payment history, and credit limit.
- Gluttony: Opening up too many credit cards at once can be “financially gluttonous,” and each time you apply for an account, it equals a credit inquiry; these can ultimately shave a point or two off your credit score. Try not to open more than one card every few months to prevent your credit score from taking a hit, and don’t try to undo past discretions by closing a few accounts at once, either, which can also hurt your credit score. In addition, never close your oldest credit card as it helps the length of your credit history.
Avoiding these common credit pitfalls can help either improve your credit score or preserve the excellent score you’ve worked hard to obtain. However, financial difficulties impact more than just a person’s credit, and for some, bankruptcy may be the best option to protect their financial future. If you are a Tennessee resident in need of assistance with your bankruptcy case, contact a skilled Chattanooga bankruptcy lawyer with Massey & Associates, P.C. We offer a complimentary consultation, so call (423) 396-0720 to get help today.
Gary Massey, Jr., is a well-known courtroom advocate practicing law in Chattanooga, Tennessee. Gary is a native of Tennessee who began practicing law in 1998. He graduated from Cumberland School of Law where he was ranked in the top 3% of his class and was an editor of the Cumberland Law Review.