What do maxing out, carrying balances, paying late, skipping payments and past dues have in common?   Those actions are just innocent moves that you as a consumer make, right?  Those are just your financial habits, right?

Yes, but they also have a more serious aspect to them…they damage your credit score and credit reports.¬† Now you don’t see the damage until you order your free credit score, so if you never order a credit score or credit report, you don’t have to face the damages, right??¬† Wrong!!¬† You may not see the damages but you are paying for them in higher interest rates and higher costs of goods and services.

How To Improve Credit Score

Your credit score is an accumulation of your financial habits.    To improve credit score, start by making yourself aware of your financial habits.   Then understand what financial habits damage your credit score.  And finally work on improving credit score by correcting those specific bad financial habits.

Financial Habits That Damage Your Credit Score

# 1) Maxing Out Your Credit Cards

When you charge up your credit cards to the maximum limits, the financial industry considers that a sign of financial trouble, it appears that you are over extended.  You will not improve your credit score, but instead damage it by lowering it.    Do not fall into the trap of thinking that credit cards give you the authority to buy everything you want.

Better Financial Habit for Maxing:

You can improve credit scores if you only charge up to half of your credit card limit.   Once you reach half of your limit, stop.

# 2) Carrying Credit Card Balances

When you carry credit card balances you not only incur unnecessary interest charges but you also damage your credit score.  The financial industry loves the money you pay them in interest; but creditors view credit card balances as a big negative.

Better Financial Habit for Balances:

A big help to improve your credit score is by developing the habit of only charging what you can afford to pay off every month.¬†¬† If you can’t afford it; don’t buy it.

# 3) Late Pays

Late payments tell the financial industry that you are over extended and overwhelmed.   Late payments will lower your credit score by 100 points.   One late payment over 90 days will damage your credit score for 7 years.  After 90 days a late pay is considered delinquent.   Creditors view delinquent payments as financially irresponsible.

Better Financial Habit for Late Pays:

Even if you just pay the minimum amount due, always make your monthly credit card payment on time.   Get in the habit of always paying all of your bills on time.

# 4) Skipping Payments

When you cannot make a payment, creditors assume you are over extended.  Creditors, retailers, insurance companies, loan companies and utility companies will charge you more when the think that you are over extended.  Companies will deny you credit because they assume you are already in over your head.

Better Financial Habit for Skips:

Always make your payments, even if it is just the minimum amount due.   You look better to the financial industry if you make a minimum payment vs not making any payment at all.  You will make progress towards improving credit scores by making at least the minimum payment vs skipping a payment.

# 5) You Have Past Due Accounts

Financial Habits Can Damage Credit ScoresCreditors view past due accounts as a very bad move on your part. Creditors assume you are financially irresponsible and they do not like this at all.

A payment that is 30 to 60 days past due will damage your credit score temporarily if you only do it once.   If you continue the habit of not paying your bills and they become  past due accounts, you can damage your credit score up to 7 years; and that is a very long time in the financial world.

Better Financial Habit for Past Dues:

One of the ways to improve your credit score is to not live beyond your means; then you won’t have to worry about past dues .¬†¬† In other words, if you cannot afford it – don’t buy it.

Take care of your credit score, it is more important to you than you may realize.¬†¬† If you credit repair, get it, don’t delay.¬† There are credit repair agencies available, you just need to call them. ¬† These credit repair services will show you where you can personally improve credit score.¬† Every one has different issues with their credit scores and credit reports; the credit repair agency will help you pinpoint yours.

Remember too that you can also help improve your credit score by paying on time, never missing a payment and never let your accounts become past due.