Your credit score is an indicator of how you’ve managed credit in the past. If you’ve made some mistakes or had ongoing issues that have hurt your credit, you may be looking for opportunities to rebuild.

One of the best ways to improve your credit is to identify bad habits you may have developed over the years and replace them with good credit habits.

According to CRB data, people with very poor credit (under 580) are using 78% of their available credit on credit cards, compared with 5.7% average credit utilization among people with exceptional credit. Looking at this and other areas of your credit history can give you the information you need to improve.

What Are Considered Bad Credit Habits?

Some credit habits that damage your credit score involve making a decision, such as applying for several credit cards in a short period of time. In other cases, though, the bad habits you need to kick involve neglecting your credit score and ignoring the steps you can take to improve it.

Some of the most common bad credit habits include:

  • Not checking your credit regularly
  • Paying late or less than the minimum on your debts
  • Not reading your credit card statements
  • Running up balances on your credit cards
  • Closing old credit card accounts

If you’ve developed some of these habits, don’t be too hard on yourself. While negative information does stay on your credit report for seven years or more, adding positive information will help you make up for past mistakes.

Here’s a breakdown of each bad habit listed above and how you can replace it with a good one.

Continuously Monitor Your Credit

You may have heard that checking your credit score hurts it, but that claim couldn’t be further from the truth. Checking your credit score and reports regularly is an important step in building and maintaining a solid credit history.

If you don’t check your credit often enough, you may miss out on potential issues that could have a significant negative impact on your credit score. For example, you may have forgotten about an account that went to collections or missed a payment.

When you check your credit frequently, you’ll be able to see where you stand, which factors are influencing your score for better or worse, and what steps you can take to address potential issues.

Build a Positive Payment History

Your payment history is the most important factor in your credit score, so even one missed payment can drop your score significantly. What’s more, late payments remain on your credit report for seven years.

The more missed payments you have and the longer you leave them unpaid, the further your credit score will drop, making it even more difficult to get back on track.

The good news is that late payments aren’t reported to the credit bureaus until 30 days after they’re due. So if you have some recent missed payments, try to get caught up as quickly as possible. You might still face penalties from your lender, but taking care of late payments before the 30-day mark will save you from credit score harm.

As you work to start making all your payments on time, you’ll also want to try to get current on accounts where you’re behind. This will help stop those negative marks from damaging your credit even more and can help you stay motivated to be on time moving forward.

One way to help ensure that you always pay on time is to set up automatic payments on your accounts. Just be sure to set them on a date when you know you’ll have enough cash in your bank account to cover them. Otherwise, you may be slapped with a returned payment fee.

If you can, try to pay more than the minimum amount due on your debts, especially your credit card accounts. Paying in full is ideal with credit cards because it keeps you from getting charged interest and helps your credit score.

Building Credit Takes Time, But Every Effort Makes a Difference

Developing good credit habits won’t happen overnight, especially if you have to tackle delinquent accounts and large credit card balances. But the sooner you begin working on improving your credit history, the more of a positive impact you’ll be able to make.

As you continue to check your credit score, credit report and credit card bills regularly, pay on time, keep your credit card balances low, and keep old accounts open, you’ll start seeing the fruits of your labors within a few months—and you’ll be on the right track toward excellent credit.

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