3. Closing Old Credit Accounts
Many people think closing old credit cards improves their score, but it often does the opposite. When you close an account, your available credit decreases, which can raise your utilization ratio and shorten your credit history length.
Example: If you close a 10-year-old credit card, your average account age drops, which can slightly lower your score.
How to Avoid:
- Keep old cards open, even if you rarely use them.
- Use each card once every few months to keep it active.
4. Applying for Too Many New Credit Lines
Every time you apply for a credit card or loan, the lender performs a hard inquiry, which can reduce your score by a few points. Multiple applications in a short period can make you look desperate for credit, which worries lenders.
Example: Applying for 5 credit cards in two weeks may drop your score by 10–20 points.
How to Avoid:
- Only apply for credit when necessary.
- Research your approval odds before submitting an application.
- Consider pre-qualification offers that use soft inquiries.
5. Ignoring Your Credit Reports
Errors happen more often than you think. A wrong late payment, unknown collection, or duplicate account can hurt your score if you don’t catch it.
Under U.S. law, you can request one free report per year from each bureau: Equifax, Experian, and TransUnion.
How to Avoid:
- Check your report at least once every 4 months.
- Use AnnualCreditReport.com (the official free site).
- Dispute errors immediately to protect your score.
2 Comments
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