It is so easy to fall into bad credit habits. Before you know it, a one-time exception quickly turns into a routine. In addition to damaging your credit score, bad habits can lead to a number of other devastating financial problems. To improve your credit score – or, better yet, avoid the situation – you should work to break this pattern of spending and debt now.
- Not keeping tabs on your credit card statements
With an overwhelming amount of bills via mail and email, it is easy to toss some aside to “get to later”. It really is important that you take some a time to review your credit card statements, however. In consistently keeping up with them, you can catch unauthorized credit card charges or billing errors and have them fixed quickly. So, the next time you glance at your balance and payment information, take an extra minute or two to go over your account activity also.
- Reaching for your credit card instead of your debit card
You should always avoid grabbing your credit card over your debit card. Why? Your debit card has direct access to the funds you need to make everyday purchases like groceries and gas. There might be situations where you do accumulate rewards using your credit card, but you should only take advantage of this if you plan to pay off your credit card balance every month.
- Paying only the minimum
It is very tempting to just pay the minimum each month, rather than sitting down and really figuring out how much extra you can afford to set aside for your credit card bill. Unfortunately, only paying the minimum will not help you make much progress, and (depending on the interest) you will probably pay more in financial charges than you need to.
- Habitually paying credit cards late
One late month, turns into another late month, which turns into six months of paying credit card bills late. If you have trouble remembering to pay early or on time, consider scheduling your payments a few days in advance.
- Applying for new credit cards you don’t need
Even though you already have credit cards, it is easy to fall for another low interest rate promotion or sign up bonus. They can be very inviting, but it is a slippery slope. New credit card applications hurt your credit score, and they provide opportunities to go into more debt.
- Buying what you can’t afford
One of the worst credit card mistakes of all is buying more than you can afford. The number one rule you should follow is, if you can’t afford to purchase it right then and there, then don’t buy it. Wait until you know you can afford it. You might enjoy the item at first, but the regret of having debt will not make the purchase worth it later.
Has bad credit affected more than your everyday personal life? Many entrepreneurs are surprised to find that their personal credit score limits their ability to secure business funding. If this sounds familiar, don’t despair. There are still providers out there that are happy to work with you. A bad credit merchant account from a high-risk provider, for example, will not only provide the funds and payment processing you need to operate smoothly, but also the ability to improve your credit score overtime.
Business Funding expert, Michael Hollis prides himself in being able to help the backbone of America; small business owners. When he isn’t helping merchants, you’re more than likely to find him scuba diving the California coast or eating at one of LA’s tasty Vegan restaurants.