3 Credit Mistakes to Avoid

With the hustle and bustle of everyday life, some things can get lost in the shuffle. Locking your keys in your car or forgetting to let your dog out first thing in the morning can be repaired quickly. One area that should not be lost in the fold is your finances. If you do not stay on top of this area, you could find yourself in debt, which in turn could affect your credit score. The best way to make sure you are keeping track of everything is by giving your finances an audit. Reviewing your bank accounts and spending habits can help you figure out where your finances are at. You can improve the state of your credit by avoiding these credit mistakes:

Frivolous spending
Overspending can be caused by impulse buying. Using your card every single day for extravagant purchases can result in you quickly running up your balance, which will then raise your credit utilization rate. When you receive your next credit card statement, look at the last few purchases. If they are expensive, it may be time to limit your spending. You can do this by only using your credit card for a common expenditure. These are expenses that you always make and that are not too pricey, like filling your car with gas. It will take some self control, but sticking to this plan can help you in the long run.

Late payments
Forgetting to make a credit card payment can negatively affect your credit. Not only will a late fee be charged to your balance, but your credit score will also be hurt.

Making credit card payments is one of the easiest ways you can stay on top of your credit. By taking care of the minimum and even paying a little extra, you will be decreasing your balance and maintaining a good credit score. Set a calendar reminder on your smartphone each month to help you keep track of when your payments are due.

Using a different card to pay off a balance
Paying your credit card on time will avoid penalties, but if you are making these payments with other cards, you may want to rethink your strategy. This may seem like a convenient option, but it will only eat into your other cards' balance.

A better option can be to allocate a certain amount of your income each month to reducing your balance.