Common credit mistakes and how to avoid them

Your credit score is an important indicator of your financial health, so it’s crucial to build and maintain a good credit history. Understanding how certain actions can impact your credit profile can help you avoid mistakes that could damage your credit score. 

Here are some of the most common credit mistakes and how to avoid them. 

Ignoring your credit 

Monitoring your credit score is a good way to not only keep track of your progress but also to spot potential issues and address them. If you don’t check your credit regularly, you could miss out on warning signs of greater issues. 

As you maintain a pulse on your credit health, look for items in your credit report that have the potential to hurt your credit score. These may include high balances, missed payments or accounts you don’t recognize. 

Not paying bills on time 

Your payment history is the most influential factor in your FICO® Score*, which means that missing even one payment by 30 days or more could negatively impact your score. Late payments typically remain on your credit reports for seven years. 

To ensure you pay all your bills on time, you can set up autopay through your lender or bank account. 

Only making minimum payments 

Minimum payments on a credit card might appear to make your debt more affordable, but interest charges can put a strain on your budget. As your balance grows, it can also potentially damage your credit because it increases your credit utilization rate, or the percentage of your available credit you’re using at a given time. 

As your card balances rise above 30% of your credit limits, the impact on your credit score increases. Make it a priority to pay down your credit card debt, and consider using other payment methods until you achieve your goal.  

Applying for multiple credit cards at once 

Virtually every time you apply for credit, the lender runs a hard inquiry to check your credit report. When you apply for multiple credit cards in a short period, the multiple inquiries can have a compounding effect in lowering your score. 

If you want to have multiple credit cards, space out your applications by at least six months. Also, consider researching credit cards and better understand your likelihood of being approved before completing an application.  

Closing credit card accounts 

When you close a credit card account in good standing (meaning you’ve never missed a payment), its history will remain on your credit reports for 10 years. But when you close a credit card, you lose its available credit immediately, which could cause your credit utilization rate to go up and hurt your credit score. 

Before you close a credit card, carefully consider your reasoning and whether the benefits of closing it outweigh the potential impact to your credit score. 

It can take years to get your credit score to where you want it to be. Checking your credit report and score regularly, paying your bills on time, keeping your credit card balances low and avoiding debt that could put a strain on your budget can all help you build and maintain a strong credit profile. 

For more information about managing your credit score, see the following articles:  

Barclays offers card customers online access to their FICO® Credit Score at no cost. Follow this link to log in and view your score.** 

*FICO® is a registered trademark of Fair Isaac Corporation in the United States and other countries. Barclays and Fair Isaac are not credit repair organizations as defined under federal or state law, including the Credit Repair Organizations Act. Barclays and Fair Isaac do not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history or credit rating. FICO and “The score lenders use” are registered trademarks of Fair Isaac Corporation in the United States and other countries. 

A credit score is a 3-digit number calculated using information on a credit report that serves as a numerical representation of a person’s creditworthiness. A credit report is a summary of your credit activity such as the payment history and status of your credit accounts which potential lenders use to offer you credit and on what terms. Your FICO® Credit Score and key factors are based on data from third-party providers who are not affiliated with Barclays. Barclays does not guarantee the accuracy of any credit information that is provided to you by these third parties. 

**FICO® is a registered trademark of Fair Isaac Corporation in the United States and other countries. Barclays offers FICO® Score access at its sole discretion. Not all accounts will have a FICO® Score available. FICO® Score access is not a permanent feature of your account and may be removed at any time. To view your FICO® Score, your account with us must be open, active (having activity within the past 150 days) and in good standing.