Credit Card Guide

Traps Consumer Fall Into That Affect Their Credit Score

This article explains a few things about credit card tips, and if you're interested, then this is worth reading, because you can never tell what you don't know.

How can you put a limit on learning more? The next section may contain that one little bit of wisdom that changes everything.

If you were not aware we consumers are tempted everyday with products and services and without restraint consumers can adversely affect their credit scores. Here is a list of some of the most common.

First is consolidating debt to get out of debt. The facts would surprise you that it often does not work. Consumers will often think they are making progress when the truth is they are just moving the debt around to a new account. If debt consolidation is going to work, the consumer must not spend back on their credit cards and invest the savings towards the actual debt consolidation loan.

Second is signing up for store credit. If you have been shopping in the last twenty years you might realize every time you buy something you are offered a new credit card for a discount on your purchase. It might seem nice at the time, but why are they even thinking about giving you a discount. Because they know if you have a store credit card, you are going to come back there to spend and the discount is nothing compared to the interest they will make off you when you carry a balance. From the side of your credit score, every time you do this it counts as a credit inquiry and could reduce your credit score. So the rule to follow is that these are usually not worth it and only apply for credit if you need it.

Third is closing old accounts they are not using. This might have been because some advice they heard or not realizing the effects. Closing old accounts is going to hurt your credit history, lowering the average age of your accounts. This will definitely hurt your score as lenders like to see a nice long history. So you will want to protect those old accounts.

These are just some of the most common traps that consumers fall in and there are several others. The best advice is to educate yourself on your credit score and what goes into it. This way you can make decisions on your own and be confident they are the right thing.

Those who only know one or two facts about credit card tips can be confused by misleading information. The best way to help those who are misled is to gently correct them with the truths you're learning here.