Credit Basics: Avoid These Costly Mistakes

💡 A Quick Guide to Understanding and Building Your Credit Score

📖 Real Talk: My $200 Mistake That Tanked My Credit

“When I was in grad school, I split a house with other students. I was in charge of the cable bill, while another student handled rent. After moving out, I canceled the cable but forgot to pay the last month’s bill. A year later, I got a call from a rude debt collector, accusing me of owing money. I thought it was a scam—until I realized he was right. I had completely forgotten about that last bill.

It cost me a few hundred dollars, but it also wrecked my credit score. If I had checked my credit regularly, I would’ve caught the issue earlier. Lesson learned: Always double-check what’s in your name and never assume a bill is fully paid—it could haunt you later!”

✅ Mistakes happen, but you can protect your credit score by staying informed!

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🚀 Why Does Your Credit Score Matter?

Your credit score affects your future more than you think! It can impact:
✅ Renting an apartment 🏡
✅ Buying a car 🚗
✅ Getting a credit card 💳
✅ Lower interest rates on loans 🏦
✅ Even some job applications! 💼

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📊 How is Your Credit Score Calculated?

Factor	Weight	What It Means
Payment History	35%	Always pay bills on time. Late payments hurt!
Credit Utilization	30%	Keep credit card balances low (below 30% of your limit).
Length of Credit History	15%	The longer you have credit, the better.
Credit Mix	10%	A mix of credit types (loans + credit cards) helps.
New Credit Inquiries	10%	Too many applications in a short time can lower your score.

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💡 How to Build & Improve Your Credit Score

✅ Check Your Credit Score for FREE – Use Credit Karma to monitor changes.
✅ Always Pay On Time – Even small late payments can lower your score.
✅ Keep Credit Card Balances Low – Use less than 30% of your limit.
✅ Don’t Close Old Credit Cards – The longer your credit history, the better.
✅ Limit Hard Inquiries – Too many credit applications can lower your score.

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⚠️ Common Credit Mistakes to Avoid

❌ Forgetting a Bill (Like I Did!) – Even a small unpaid bill can go to collections.
❌ Missing Payments – Even one late payment can hurt your score.
❌ Maxing Out Credit Cards – Using more than 30% of your limit is a red flag.
❌ Applying for Too Many Cards at Once – Each application lowers your score.
❌ Ignoring Your Credit Score – Check it regularly to catch mistakes early!

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🎯 Take Action Today!

📲 Check Your Credit Score Now – It’s FREE with Credit Karma (and won’t hurt your score!).
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