| There are several things you may be doing that you | | | | a card at a store you shop at a lot and know you will |
| think help your credit, but in fact might be hurting it. | | | | pay down the bill regularly, just make sure you read |
| Here are three actions that could backfire on you and | | | | the fine print first so you understand all the terms of |
| damage your credit score: | | | | the credit card agreement. |
| #1 - Cancel credit cards that you don't use anymore | | | | #3 - Ignoring your credit report |
| This may seem like a great idea. Credit cards are bad, | | | | Many people simply don't take the time to review their |
| right? The fewer you have the better? Not exactly. | | | | credit reports, and this can really hurt your credit |
| That unused card may be helping your debt-to-credit | | | | scores. Your credit report shows all of your historical |
| ratio, which in turn helps your credit score. A good | | | | credit information: the accounts you've had or currently |
| debt-to-credit ratio means that you have a small | | | | have, whether you pay on time each month, and how |
| amount of debt in your name relative to the amount of | | | | much debt you have. Your credit scores are based on |
| credit that's been extended to you. Ideally, you want to | | | | the information listed in your credit report. So if there is |
| have large card limits but small credit card balances. If | | | | inaccurate information on your report, or if it contains |
| you cancel a card, you're cancelling its credit limit that is | | | | fraudulent activity, your credit score could be lower |
| helping your debt-to-credit ratio. | | | | than it needs to be. The Fair Credit Reporting Act |
| #2 - Getting discounts on purchases by opening retail | | | | gives you the right to an error-free report, so if you |
| cards | | | | spot anything not quite right you need to file a dispute |
| 15% off your purchase sounds like a pretty good deal, | | | | with the bureau distributing the report. Identity theft |
| right? All you have to do is open a store credit card, | | | | victims who have fraudulent accounts and large |
| and the discount is yours! The problem is that applying | | | | amounts of debt on their credit reports suffer from |
| for new lines of credit can hurt your credit score. | | | | lower credit scores, keeping them from new loans and |
| Higher levels of debt you might take on using the new | | | | lines of credit. Don't let that happen to you! Stay |
| card can also hurt your score. And a retail card can | | | | proactive by checking your credit often to always |
| also hide a lot of tricks up its sleeve, like automatic | | | | know where you stand. |
| hidden fees or no grace periods. It's okay to apply for | | | | |