Credit cards are still good to use if you use them wisely. However, your credit score can get damaged by a few things that are caused by your own activities. Here are four that you need to steer clear of in order to keep your score up.
Cash Advances - Taking a cash advance from your credit card might seem like an innocent thing, but it is a red flag with the credit card company. They view these as a desperation move. So, why do they continue to offer them? Because they make money on them. Using cash advances to pay for daily expenses is not a good thing to do anyway. It is a sign of a larger problem that you need to address. Either, increase your income or lower expenses – or both.
High Balances on Retail Cards- Retail cards are used less frequently than other credit cards. Large balances on these cards tend to indicate fewer financial options and signal that you might be under financial stress. Make a strong effort to pay these down and then use them only for necessary purchases that you know you have an income stream with which you can pay off within a month.
Too Many Opened Accounts Too Soon - If you try to open too many credit card accounts to close together, then that is another sign of financial desperation. Even if you are in financial desperation mode, do not try to get more credit cards. You will be adding to your frustration by putting off the facing of your situation.
Unpaid Medical Bills - If you have outstanding medical bills, those will be reported to the credit bureaus and your score will go down. These types of bills are not uncommon, but you need to manage them better. One way of doing this is to set up a repayment schedule with the medical provider before the account goes delinquent. Find out what they will do to work with you. Most of these offices are used to this and will work with you.
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