1. Closing Credit Card Accounts
Although it seems logical to close the accounts once they have been paid off, you should never cancel an account unless it is absolutely necessary.
Note that, 30% of your credit score is calculated by how well you manage your debt and use your available balance. You should try to use no more than 30% of the credit limit on your credit cards, for example, if you have a card with a $1,000 limit, your balance should never exceed $300.
The average length of your accounts is 15% of your credit score. Closing an account will decrease your score under this 15% calculation. It will take a lot of time to recover the lost points to your credit score.
Having a wide range of credit will also help you credit score.
Although it’s a great way of stop the temptation to use your credit cards, it will destroy your credit score.
2. Running Up Too High of a Balance
This is another very easy thing to do. It is so easy to spend, but, not so easy to pay back. This can make your credit cards very expensive forms of payment. If possible. always try to pay off the credit card at the end of the billing cycle. Never leave more than 30% of the available credit, if you are looking to increase your credit score.
3. Not Using the Credit Card
You don't need to use the credit card more than twice a year, but, it is important to keep using them. This will ensure that the credit card company doesn't cancel your account and will continue sending positive credit information.
4. Not Checking Your Credit Report Frequently
This can get you into a lot of trouble. You should check your credit score at least once a year. Look for false or suspicious information.
5. Applying for Too Many
Every time you open a new account it lowers your average length of accounts percentage and is a hard inquiry on your credit report. So, don't fall for a cashier's spiel about saving by signing up for a store credit card.