Aiming For A Shining Credit Score? Well, You Must Avoid These 8 Mistakes

If you’re thinking about applying for a new credit card, a loan or a mortgage first thing you ought to ensure is that your credit score is spick and span.

A low credit score will make you untrustworthy, so to speak, with your lenders and you may face trouble securing a loan or a credit card. Stay clear of these 8 common mistakes typically made:

A Bad Payment History

If you have not had the best record in making due payments, this could be a negative on your credit score. Late Credit Card payments, late bill payments, late loan repayments or nil

Credit Utilization

How much credit is good credit? The typical benchmark is 30%. The less your credit utilization the higher your credit score and the more cooperating your lenders.

Credit Utilization is calculated by dividing the amount of revolving credit that your current usage reflects divided by your overall credit limit.

This figure is what needs to be below the 30% ceiling for you to have an acceptable credit utilization score.

Numerous Hard Inquiries

The more the number of applications you make for Credit Card, the higher your number of Hard Inquiries.

Every time a financial institution checks your Credit Score to assess whether you are the right candidate for a service like a credit card or not, it adds to Hard Inquiries in your account and reflects on your score.

One way to avoid this is instead of applying to multiple companies for a loan, you may consider applying to companies online. These are considered soft inquiries and do not malign your credit score.


A judgment demanding you to make certain payments is not the most welcome entry on your credit score. As this indicates that formal legal measures had to be taken to compel you to clear your debts.

Thus, this must be avoided at all costs. In case you do get dragged into a court case, try to persuade the other party to go for an out of court dispute settlement as most countries have Alternate Dispute Resolution mechanisms like Arbitration, Conciliation, Negotiation or Mediation.

No credit history

Someone with absolutely a clean page of credit history can apply for a credit card or loan. Many lenders have facilities for such customers as well.

There are different kinds of credit cards. You can even go for a secured credit card, a retail credit card or a student credit card.

Avoid Getting Your Account Charged Off Or Sent For Collection

When you have defaulted on your credit card payment more times than is acceptable, the lenders get your account charged. Think of it as “blacklisting” you.

This causes much damage to your credit score. A lender may even send your account to third-party debt collectors which is a reflection of how they failed to receive payments from you directly and were compelled to hire other sources for the same.

Settle Payments Before Closing Your Credit Card

Before you close your credit card for good, be mindful of the fact that it is settled. Closing your credit card while it still has balance will have the effect of nullifying the limit while your balance remains the same.

This indicates that you have exceeded the limit of your credit card which always leads to the lowering of your credit score.


Multiple payday loan rollovers may lead to your lender transferring your account to a collection agency who may, in turn, report the non-payment of the loan to bureaus which negatively impacts your credit score.

Once you file for bankruptcy it not only impacts your credit score negatively, it requires re-evaluation your entire financial life. A foreclosure can similarly very adversely impact your credit score.

And both bankruptcy and foreclosures have a certain cooling period which is different across states before which you can even apply for fresh credit. Collection accounts, charge-offs, late or missed payments etc. also have an unfavorable effect on your credit score.


To improve your credit score, give yourself time. Better than making payments on time is making payments earlier. This always goes a long way in ensuring that your credit score soars.

If you have too many loans in your name, try to pay some of them off to improve your credit score.

If you have a joint account with someone, keep a tab on all the payments on that account as well as that equally affects your credit and we overlook it oftentimes.

Sometimes, there are even errors in your credit score, so go through hit carefully and bring it to the notice of the authorities.