Bad Credit Habits Sure To Sink You

If you want to gauge how you handle credit the following information will tell you how to avoid bad credit habits that can ruin you. Test yourself to see how well you perform:

Making Minimum Payments Only - If you carry your credit card balances from month to month, then you may know that if you only make the minimum required payments that you could end up paying a lot more over the course of time for your purchases. Usually, credit card providers allow consumers to pay back only 1% of the outstanding amount every month. With compound interest it'll take you 8, 10, or 12 years or more to pay off what you owe even if you weren't to purchase another thing. Pay at least twice the minimum and you'll knock off your debt much faster. Better yet, make plans to pay off the balance as soon as possible.

Making Late Payments - If you are even just one day late making a credit payment, you could find yourself paying a late fee of $29 or $39 and see your account converted to the default interest rate. Default interest rates are very high, typically 20 percent or better.

Lack of Communication with Creditors - If you are unable to pay your bills on time, notify your creditors at once. A lack of communication to them means that you are trying to skirt your obligations. Better to come clean and share your troubles then to let things slide by. Open communication could mean that a one time forgiveness of your credit card bill. You'll still owe the money, but you could avoid one month's payment.

Not Applying Balance Transfers Properly - A balance transfer of funds from one credit card to another can help you save money. If you choose to use those balance transfer checks for something else, then you could be putting yourself in a deeper hole. Only use balance transfer options to pay off debt.

Failure to Obtain Your Free Credit Report - All three credit reporting bureaus are required to release one copy of your credit report to you on an annual basis per your request. Through www.AnnualCreditReport.com you can get your free copy and order your credit score for a few extra bucks. Examine your credit report closely and fix those problems now.

Truly, bad credit habits can sink you. Take action today and you can put bad credit out of your vocabulary.