[N]o matter how responsible you are with your money, a simple mistake can hurt your credit score. One moment of action or inaction can impact you for months or even years. Avoid these mistakes to protect your score.
Not Paying a Bill You Don’t Owe
If you feel that you don’t owe a bill or as much as you were charged, you may decide not to pay it. However, unless you can prove that you don’t owe what is charged to you, this decision will end up hurting you. It will be reported as a late payment, which will cause your credit score to drop.
Forgetting to Make a Payment
It can be easy to overlook a payment if it isn’t automatic or you don’t receive reminders that it is coming due. However, a payment that is 30 days past due will hurt your credit score. This one mistake will take at least a year to overcome and may lower your credit score for even longer. Payment history has the biggest impact on your credit, so take it seriously.
You Forget about a Medical Bill
If you have an illness or injury that results in numerous bills, you may end up overlooking one or not realizing that you owe money to a provider. While changes to credit bureaus and credit reporting have decreased the amount of damage a medical bill can do, you still want to pay attention. If you are not sure whether you owe money, contact the creditor or your insurance company to find out.
You Co-sign on a Loan
It may seem like a nice thing to do to co-sign on a loan for a family member or friend. But you must realize that you are responsible for that debt, and it will appear on your credit report as if it were your loan. Even if you know the person will make the payments on time, you can end up reducing the amount of credit you can qualify for because of this debt.
Be aware of these mistakes to protect your credit for now and in the future.
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