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5 habits that can wreck your credit

You may not even remember making the small decisions that, taken together and done over and over, can put a big dent in your credit scores.

By Sep 17, 2013 11:28AM

This post comes from Jeanne Kelly at partner site logoHave you ever driven home from work and then not remembered a thing about your drive? Have you ever stepped on the scale and wondered how those extra pounds appeared?

Senior man using laptop with credit card © Image Source, Image Source, Getty ImagesBlame it on habits. Habits are those activities we do unconsciously because we've done them so many times before. We're not even fully aware when we're doing them, and then the results tend to pile up unseen.

Of course, credit is one of those things that can suffer from bad habits. So let's take a look at five bad habits that can wreck your credit:

1. Putting everything on a credit card
It's easy to break out the plastic and charge everything. After all, it's hard to remember to get cash from the machine and there are so many cards in our wallets anyway.

But paying for everything by credit card is a way to run up the charges without realizing it, and the monthly statement is almost always a shock. If you want to take advantage of credit card rewards by charging everything, make sure you check your accounts frequently so your statement doesn't catch you off guard.

2. Buying because of the discount
We love a deal and we sometimes buy discounted items because we might need them in the future. But just because something is "on sale" doesn't mean you should buy it. The key is: Can you pay it off on time? If you don't, any credit card interest you owe on the outstanding amount will almost certainly erase any discount you might have had.

3. Putting aside bills to deal with later
When you get a bill in the mail, deal with it right away. (I advise clients to open their envelope, pay the bill and then file it immediately). But this works only if you've set a budget and know when your bills come in.

Often what happens is, bills flow in, they get stuffed into one overwhelming pile, and then you have to sort through your bills to figure out what happened that month and how you're going to pay them all. And if you're not careful, some of those bills might not be dealt with until after their due date (which has one of the biggest negative impacts on your credit).
4. Applying for credit whenever you get an offer
When you respond to every credit card or retail card offer, your credit is hit with an inquiry. Too many inquiries can drive your credit score down. Instead, you should try to get credit only when you need it or when you know you need to build more healthy credit.

5. Complacency
This is the worst habit of them all because it's so hard to spot. When someone feels that working on their credit is simply too much work, or they avoid dealing with some of the short-term unpleasant realities of their credit report, then they have the bad habit of complacency.

This bad habit ignores the risks and accepts whatever may happen -- which will inevitably lead to a lower credit score. (Hint: This is the most important bad habit to fix!)

One of the best things you can do is start to identify some of your bad habits that are impacting your credit and start to eradicate them. Keeping tabs on your credit is an important part of that process.

You can check your credit score using a free tool like's Credit Report Card, which gives you your score plus a breakdown of the major components of your credit score (payment history, credit usage, length of credit history, mix of credit and new credit) to see what areas you need to work on.

It's equally important to check your credit reports, which you can get for free every year from each of the three major credit-reporting agencies. You can pull a copy from a single bureau once every four months to monitor your credit throughout the year.

Remember: Good credit habits lead to good credit history and a good credit history has a positive impact on your credit score.

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Sep 17, 2013 2:43PM

So this reporter was interviewing a lovely, spry centenarian woman; talking about her health and the factors that she felt had contributed to her longevity. At one point in the conversation he asked her if, in all that time, she had ever been bed ridden, to which she enthusiastically replied, "Oh yes! And twice in a buggy!!!"

Sep 17, 2013 11:10PM

Where do they come up with these great ideas to write about?  Yes I agree common sense.  IN an ideal world, Most getting laid off scraping to get by until the house is repo, think they care by then if credit cards get hit too ! Lay offs impacting most that always had perfect credit scores, they need to factor this into there scores when most finally get on there feet HELLO.



Sep 23, 2013 12:51AM
I used to only have one credit card that i kept paid down pretty good and usualy had about 10k in the bank. I said 2 little words and my life has been in financial hell since. What was those 2 words? I do.
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