When you want to talk credit score, you don’t have to look very far to find out just how important that number can be.
If nothing else, the term “credit score” is all around you, and the mainstream media is sure quick to point out through marketing and advertising just how important a good score is. Look no further than commercials that tell you to check your credit any chance you get, just so you don’t have to live at home for the rest of your life or drive around in that same clunker for the next decade or so.
And while checking your credit score makes perfect sense since you should always know what’s on it, and how to avoid certain pitfalls such as too high of a debt to income ratio or debt ceiling, that isn’t the most important element of your score itself.
The irony is the biggest credit score mistake you can make is one that is most avoidable: missing a payment.
Missing a loan payment is a credit score nightmare for the masses, since that not only drops your score a few points here and there, but also shows lenders that they may (or may not) get paid on time, and then late or not on time turns into perhaps not being paid at all.
That perception and history of missed payments is a hard one to break since creditors can only go by so many factors when determining if you’re available for a loan. They don’t have the luxury of looking at your assets (unless you’re buying a house) but rather hone in on your income, debt to income ratio and your credit score itself.
The score can easily be manipulated into a better state by simply coming up with a game plan to pay on time, whether that’s an automatic payment you set up or a friendly reminder on your smart phone.
Naturally, there’s a few other missteps you want to avoid (having too much debt in credit cards alone, applying for credit in a rapid fire way) but the crux of what is going to kill your credit centers on the simplicity of just paying on time.
Finding a way to do that could mean adjusting your budget and being able to pay what you owe. If nothing else, if you’re having trouble making payments talk to your creditors and communicate your issue. That might not save you from a few dings on your score but ultimately can allow them to denote your accounts.
Your score isn’t always a make or break endeavor as far as getting a loan but if you’re interested in keeping it respectable, you might want to consider the idea of just paying on time for starters.
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