3 Habits that Spoil an Excellent Credit Score

Most people think that if they don’t have any debt to pay off and they pay their bills on time, that should be enough to get a perfect credit score.

Actually, that is anything but the case.

Yet there’s no doubt that having a good credit score is imperative if you want financial success. That said, here are 3 habits to avoid that can ruin an excellent credit score:

#1: A big balance on your credit card

Along with timely payments, your credit utilization ratio (amount of credit you use) is used to determine your credit score. This increases substantially when you have big balances on your cards regardless of whether you pay it off on time or not. Keep that credit utilization ratio to about 20 to 30 percent for each card and as a whole.

#2: Closing several credit card accounts at a time

Instead of increasing your credit score, closing several credit card accounts can actually do the opposite. This is because it will reduce the total amount of credit and push up your credit utilization ratio. So, it’s fine to have several cards as long as you are responsible. However, don’t make the mistake of opening too many cards at the same time.

#3: Not checking your credit reports regularly

You are allowed to check your credit report at least once a year. However, experts believe that checking it every few month using annualcreditreport.com is better. Why this is important to do regularly is because not only will you gain insight into what you’re doing wrong but you can also check for errors that are present in almost one out of four credit reports.