Showing posts with label ‬ ‪credit score. Show all posts
Showing posts with label ‬ ‪credit score. Show all posts

Common Credit Mistakes (and How to Avoid Them)

Common Credit Mistakes
Your credit score can determine whether or not you get approved for a credit card, mortgage or auto loan. It can also be used to determine whether or not you can rent an apartment or even get a job. The importance of your credit score doesn’t stop there though; it also can impact how much you’ll pay on utility deposits, more importantly, interest rates.   

There are different scoring systems, but for all scores, higher equals better. With a higher score, you may be more easily approved for credit and will get the best interest rates available. 

So how do you know how to keep a good credit score? Consider avoiding these common credit mistakes: 
  • Carrying large balances: Keeping your balances as low as possible increases your credit utilization ratio, the percentage of your credit limit that you use. The amount you currently owe on accounts can make up to 30 percent of your credit score.  
  • Closing credit cards: You might think closing credit cards you don’t use anymore is the responsible thing to, but your score can actually be hurt by closing accounts. This is because when you close an account, you lower the amount of credit available to you. Remember your credit utilization ratio from above? It is ideal to have credit available to you, but not be using too much of it. 
  • Making late payments: About 35 percent of your score is related to your payment history. Late payments on credit cards, loans or other bills could lower your score if those late payments are reported to the credit bureaus. 
  • Defaulting: Failing to pay back the amount you owe on a loan or credit card can seriously impact your score. Bankruptcies and foreclosures are considered the most serious.  
  • Opening too many new lines of credit: Each time you apply for a credit card or loan, an inquiry into your credit history is made. This may negatively impact your credit score.  Opening multiple credit cards or loans is a red flag; it may signal that you are in financial distress and/or at risk of becoming overextended.  Having multiple new accounts can also negatively impact your credit score. 
  • Not having a credit card: You may think paying all cash all the time is the best thing to improve your credit, but if you have no credit cards, then you have no credit history. You are considered “un-scoreable” because there isn’t enough information to calculate a score. With no score, you may appear risky to lenders. If you have an auto loan but no credit card, you may still benefit from a credit card, as that could help diversify your credit file. The mix of your credit history accounts for 10% of your score. 
Avoiding as many of these mistakes as possible and maintaining responsible spending and saving habits can help set you on the path to achieving your financial goals.  

Identity Thieves Targeting Prescriptions

When it comes to preventing identity theft, you probably know that guarding your Social Security and Medicare cards are important. However, now it seems that you’ll need to be just as careful with your prescriptions.

Statistics show that stolen credentials can be a cause of identity theft. These stolen credentials can potentially grant thieves access to your medications, resulting in the possibility of them being filled at your expense.

Another form of identity theft by prescription is when an identity thief uses your information to have a medicine prescribed and filled, oftentimes using your medical insurance. When this happens, you could be left paying the bill for medicine you don't even need.

Both of these identity theft actions leave you in an unpleasant situation; you'll either be without the medicine you need, or you'll have unnecessary medicine added to your medical record.

Unfortunately, these aren't the only forms of medical identity theft. Other signs that you may have become a victim include:

  •  Receiving a bill for medical services you didn't have
  •  Calls from debt collectors for medical debts you don't owe
  •  Notices from your health insurance saying you've reached your benefit limit
  •  Denial of insurance because of false medical records

All of these actions can come at a heavy price including the potential to ruin your credit score, loss of health coverage, higher health insurance premiums, inaccurate medical records or even legal troubles.  

While it may be harder to detect medical identity theft once it has occurred, you can still take steps towards preventing it by making sure you treat all personal information as private, and considering signing up for an identity theft protection service.