Everyone always talks about getting a high credit score and how difficult it is to get it very high. On the other hand, getting a low cake is extremely easy.
Getting a great credit score takes years and years of payments on time, not over spending, and budgeting correctly. Ruining your credit, on the other hand, can be as easy as missing a few payments, going on a shopping spree, or even shopping the credit market. A few missteps and you could see your interest rates go through the roof, and your ability to pay the bills drop dramatically.
The best way to make your credit score plunge is to break some of the cardinal rules of credit. Here are some crucial rules that you should follow to keep yourself and your creditor’s happy.

Upgrading your plastic

It seems like every day that I receive a new offer in the mail for a credit card. Each one that I get seems even more tempting, free flights, extremely low interest rates, free gifts, cash back, the list goes on and on. It is very tempting to sign up for a lot of cards to take advantage of all the prizes.
Lenders enjoy having loyal customers over customers that are borrowing from every credit card company in existence. Occasionally, creditors will look at your credit report to see what your recent activity has been. If they find the amount of credit you have has increased dramatically, then they could reduce the amount that they are lending to you. They could also reduce your credit score to slow down the amount of applications that you are making.
Each credit product that you get will remain on your credit report for a minimum of 7 years, so make sure that it is something that you really want before applying because it may have a negative impact if it is only open for 2 days.

Forgot to pay the bill

It is easy to forget to pay your monthly bill. Maybe you were on vacation, or maybe you completely forgot about it. No big deal, it happens to the best of us, right?
Lenders do forgive late payments if they are brought up to date as soon as possible.If you do not let late payments happen, and make the payment within 60 days, then you should not have much of an impact to your credit report.
If you make a habit of missing payments, then you are in for some extremely bad consequences. The most important aspect of your credit score is your ability to make your monthly payments on time. For example a 90-day late payment could be as damaging as bankruptcy filing, a tax lien, a collection, a judgment, or a repossession. It is extremely hard to recover from this, so don’t let it happen.
The lesson is to pay your bills. Even if you cannot pay the whole bill, then at least pay the minimum. You should never miss a rent or a mortgage payment. If you think you might miss a payment, then try to call the company before hand to see if there is any alternatives. If your lucky, then you might be able to get a skip a payment.

Maxing out your Credit Limit

The bankers have decided that you are worthy of a credit limit of possibly $10,000, $40,000, or even $100,000 on your credit cards. Finally, your dreams of being able to buy almost anything you want is within reach.
Not so fast, just because the bank has decided to provide you with a large credit limit, that doesn’t mean that you can afford it if you use your credit limit. If you spend the money, then you may end up i debt for the long-term if you are not careful.
Don’t always use your credit cards, and if you do, then try to pay them off at the end of every month. Don’t spend what you cannot pay off at the end of the month. With the way that you manage your debt making up to 30% of your total credit score, it is important that you manage your debt well.
Try to keep your debt levels at 10% or below. If your debt levels exceed 50% of your available credit, then this will signal a red flag to the bank and may affect your credit score. Try to keep your debt levels as low as possible.

Keep your Old Credit Cards

A lot of times, when clearing out our wallets, we can find old credit cards that we may not use anymore. It is easy to phone up the companies and get them to cancel the card; however, this will affect your credit history. 15% of your credit score is determined by how long your credit products have been open for. If you cancel your oldest credit cards, then you are throwing away some of the best cards that you have in terms of your credit report.
You should celebrate the fact that you have been able to keep this card for so long. If you are looking for some cards to get rid of, then you should be looking to get rid of your newer cards first before your older cards. Credit cards are like fine wines, the older they get the better they are.

Credit Diversification

Lenders like to see that clients have the ability to pay off different types of lending products. The lenders will give you good grades if you have all different types of products like loans, lines of credit, credit cards, mortgages, and secured lending. The more different products you have used, the better. That doesn’t mean that you should run out and diversify right away. Instead, you should diversify over time. As the time comes up where you need a certain product, then you should get it then. If you do not need a lending product, then there is no sense in getting it in an attempt to build your credit report.
Also, by building up your lending portfolio, you are also building up the amount of fees that you will be paying. On most credit cards, there is an annual fee associated with the card. If you have one or two cards, then it is fine; however once you have a lot of cards, then the fees can be incredible.
Don’t ever get any lending in an attempt to build your credit rating, and never carry a balance on a card with a sole purpose of bringing up your credit score.

If you manage your credit products properly, then you should have no problem maintaining good credit score. Also remember that time heals all wounds, and most major damages to your credit report, can take up to seven years before they are finally removed from your credit report. Follow these five cardinal rules and you should have no problems with lenders.

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