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Did you know that the average credit score in America is 711?
While this number is classified as good, there are plenty of people who fall into the fair and poor groups. Any credit score below 670 is fair and jumping below 579 puts you into a bad ranking.
The harmful effects of bad credit can’t be stressed enough, which is why it’s crucial for everyone to aim as high as possible. How do you get bad credit exactly? Keep reading this guide so you can learn 5 mistakes to avoid.
Missing Credit Card Payments
Being a responsible adult is tough when there are so many balls that we all have to juggle. Since missing credit card payments is terrible for your credit score, you should make life easier by automating your payments.
This will ensure that your payments never arrive late.
Filing for Bankruptcy
The fastest way to get poor credit is to file for bankruptcy. This decision may be best for you in the long run, it’s something that you should never take lightly.
If you’re positive that filing for bankruptcy is what’s best, then you can start learning how to repair your credit today to get back to a positive standing.
Not Having a Long Credit History
Lots of young adults are worried when they see that they have a bad credit score right after they open their first account. This shouldn’t concern you too much since this number will improve over time.
The longer you can prove that you’re a reliable borrower, the higher your score will jump.
Making the Minimum Payments
One simple way that people slip into a bad credit score is by giving in to the temptation of only making the minimum payments on the credit card. While this allows you to borrow more for less, it can wreak havoc on your credit score.
Not only do you end up paying more due to interest over time, but your borrowing rate also becomes unfavorable.
Opening Too Many Accounts
Have you been saving up for a big purchase and you’re tired of waiting? A common mistake that people make is opening a bunch of credit cards at once so they can increase their borrowing power.
Starting too many new accounts can cause your number to crash since these lines detract from your borrowing history.
How Do You Get Bad Credit? Now You Know the Facts
It’s always good to ask yourself, “How do you get bad credit?” By taking the time to learn about the top causes of bad credit, you can be a smart consumer and work toward building a stronger credit score.
Getting a grip on the vast world of personal finances can be stressful since there’s so much to learn. If you want to gain access to the most helpful articles that break complex topics down into simple language, then you’ve come to the right place. Hang out on our blog a while longer so you can enhance your knowledge of personal finance and more.