Your credit score is one of the most important financial indicators that can impact various aspects of your life, from getting approved for loans to securing a good job or renting an apartment. Unfortunately, many people unknowingly make mistakes that harm their credit scores. At Laventure Solutions Consulting, we help individuals take control of their financial health by identifying and addressing these mistakes. In this guide, we’ll discuss six common ways people mess up their credit scores—and, most importantly, how to fix them.
1. Missing or Making Late Payments
Why It Hurts Your Score
Your payment history makes up 35% of your credit score. Even one late payment can significantly lower your score, especially if it’s reported to the credit bureaus. Consistently missing payments can lead to collection accounts, making it even harder to recover.
How to Fix It
- Set up automatic payments to ensure bills are paid on time.
- Use calendar reminders to manually pay before the due date.
- Contact your creditors if you miss a payment—sometimes they’ll waive late fees or allow adjustments.
- Enroll in a payment plan if financial hardship prevents you from making full payments.
2. Maxing Out Your Credit Cards
Why It Hurts Your Score
Your credit utilization ratio (how much of your available credit you’re using) makes up 30% of your credit score. If you’re constantly using most of your credit limit, lenders view you as a risk, even if you pay your bills on time.
How to Fix It
- Keep credit utilization below 30%—for example, if you have a $10,000 credit limit, try not to exceed $3,000 in usage.
- Request a credit limit increase, but avoid increasing spending.
- Pay down balances multiple times per month to reduce your reported utilization.
- Use multiple credit cards strategically instead of maxing out one.
3. Closing Old Credit Accounts
Why It Hurts Your Score
The length of your credit history contributes about 15% of your credit score. Closing old accounts shortens your credit history and can also increase your credit utilization ratio.
How to Fix It
- Keep old accounts open, especially if they don’t have an annual fee.
- Use old accounts occasionally to keep them active.
- Consider downgrading to a no-fee card instead of closing an account.
4. Applying for Too Many Credit Accounts in a Short Period
Why It Hurts Your Score
Every time you apply for a new credit card or loan, a hard inquiry is recorded on your credit report, which can temporarily lower your score. Multiple applications within a short time frame can signal financial distress to lenders.
How to Fix It
- Apply for credit only when necessary.
- Space out applications by at least six months to minimize the impact.
- Check prequalification options before applying for new credit.
- Use a mix of credit types, such as credit cards and installment loans, to build a strong profile.
5. Ignoring Your Credit Report
Why It Hurts Your Score
Errors in your credit report, such as incorrect late payments, fraudulent accounts, or outdated information, can significantly harm your score. Many people never check their credit reports and don’t realize mistakes are dragging their scores down.
How to Fix It
- Review your credit report regularly—you’re entitled to a free report every year from each bureau (Experian, Equifax, and TransUnion) via AnnualCreditReport.com.
- Dispute errors by contacting the credit bureaus with supporting documents.
- Report fraud immediately to prevent further damage.
- Monitor your credit with free services like Credit Karma or Experian.
6. Not Having a Diverse Credit Mix
Why It Hurts Your Score
Your credit mix contributes about 10% of your score. If you only have one type of credit, such as just credit cards or just student loans, it may not optimize your score potential.
How to Fix It
- Consider adding different types of credit, such as a car loan, personal loan, or mortgage (only if needed and within your means).
- Use a small installment loan to establish a better mix.
- Become an authorized user on someone else’s credit card to improve diversity without taking on more debt.
Conclusion
Maintaining a healthy credit score requires awareness, discipline, and strategic financial decisions. If you’ve been making any of these six mistakes, don’t panic—there are clear steps you can take to repair your credit and improve your financial standing.
At Laventure Solutions Consulting, we specialize in helping individuals rebuild and optimize their credit scores. Whether you need guidance on debt management, dispute resolution, or credit-building strategies, our experts are here to support you.
