In the credit game, several traps will keep you from achieving a high score. Here are four credit traps to avoid at all costs.


Credit Trap #1: Late Payments


Your payment history has the most significant impact on your credit score.


Payment history is essential--a late payment will remain on your credit score for seven years. Thankfully, a late payment doesn't follow you forever. If you are careful, then your score can bounce back. As your late payment gets older, it starts to impact your credit score less. For example, a late payment today hurts your score more than a late payment from five years ago.


When it comes to boosting your credit score, the best thing you can do is focus on making on-time payments starting today.


Credit Trap #2: Maxing Out Your Credit Card


Your balance has the second most significant impact on your credit score.


​If your balance is higher than 30% of your credit card limit, then your score will drop. For example, if you have a card with a $500 limit, then you should charge no more than $150 on your card. If you charge more than $150, then your score will start to drop. ​Most credit lenders prefer you not to use more than 30% of your credit line.


According to Bankrate, credit utilization refers to the amount of credit you have used compared with how much credit you have been extended by a lender. It also refers to a ratio that lenders use to determine your creditworthiness and is a factor that is used to determine your credit score.


You can find out your charging limit by using this formula:


Your Credit Card Limit x .30 = Your Charging Max




Credit Trap #3: No Credit History/Short Credit History


Your credit history makes up 15% of your credit score. This means that having an extended credit history helps your score.


If you are now starting to build your credit, don't worry about not having a credit history. Focus on building a strong credit history with on-time payments and keep your balances low.


If you have a long credit history, be careful of closing your oldest accounts. Your score will most likely drop.


Credit Trap #4: Too Many Applications


New credit applications are called inquires. Every new application remains on your report for two years. New applications for credit only make up 10% of your credit score. You should only apply for a credit card when you need it.


There are some exceptions to applying for credit. For example, with loans, like an auto loan, it is a good idea to apply to a few credit lenders so that you can choose the best rate. If you apply for auto loans with a number of lenders within a two week period, then all the applications will impact your credit score as one inquiry. The same applies for a mortgage.


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