The 3 Most Common Credit Score Mistakes

Pamela Paulson Tells Us What Not to Do

Let’s face it: Credit scores are confusing. They can be a tangle of interlocking statistics, inexplicable issues, and complicated algorithms. That’s why, on Episode 20 of “The HartBeat Show Podcast,” Pamela Paulson from Home Loans Assist and I broke down the seven biggest mistakes people make that hurt their credit score. Here are three of those.

1. Ignoring Your Credit Report
   “We always recommend that consumers check their credit reports regularly. Doing so allows them to identify any problems or errors, correct anything that isn’t accurate, and detect signs of identity theft,” Pamela says. You can’t address a problem that you don’t know exists, folks! You get one free report per year, so check it out.
2. Assuming No Debt Means Good Credit
   “Lenders check credit to see whether the borrower can be counted on to pay back money they borrow. If the consumer never borrows money, lenders have nothing to go on,” Pamela says. People are always shocked when they’re turned down for a home loan because they have no credit history to speak of. Get a line of credit as soon as possible, and start using it for basic purchases — but make sure to stay on top of payments!
3. Paying Late or Not at All
   “Credit scoring models have a lot of different moving parts. But here’s the one thing that consumers need to know: The biggest factor in a credit score is the payment history,” says Pamela. “A late payment or a missed payment on the credit report counts against you.” Of course, sometimes things happen and you can’t make a payment for one reason or another. But in these cases, it’s important that you reach out to your creditor and give them a heads-up. The worst thing you can do is just let the payment date pass by with no contact whatsoever.

Of course, I couldn’t fit all of Pamela’s tips here in the article. For more information about your credit, including a seven-part, in-depth series with Pamela Paulson, check out “The HartBeat Show Podcast” on iTunes, Spotify, or wherever you get your podcasts!