4 Common Credit Mistakes Families Make and How to Avoid Them

A lot of people still don’t understand how to use credit even though most working adults have or had access to credit at some point in their lives. But misunderstanding credit can lead to serious consequences down the road and block access to financing or even basic amenities in some cases.
Credit doesn’t have to be complicated. Sometimes, just having a solid foundation will allow you to avoid most pitfalls households fall into and start building a healthy relationship with credit. Here are a few common credit mistakes families make and what can be done about them.

Thinking their Credit is the Only Determinant in Getting a Loan

While your credit will often have a direct effect on getting a loan, some lenders put more importance on your employment history. And we’re not talking about payday loans only.
For instance, services like BingoLoans offers Short term loans from 50 to 1500 pounds that can be repaid within 2 to 6 months. Payday loans could also be an option. Working with a flexible and reliable service could help in times of severe emergency, so make sure you do your homework on any service you’re thinking of working with, and ensure you understand the terms of your loan clearly.

Underestimating the Effect of Late Payments

Any missed payment on a bill, no matter how small it may seem, could have an effect on your credit score. Late payments that are reported to a credit bureau will stay on your report for a total period of 6 years. So make it a habit to always pay on time, and consider opting for automatic payments if you’re struggling with this.

Only Paying the Minimum on Your Card

If you can’t afford to pay more, this is fine, but forget the myth that paying the minimum somewhat makes you more attractive to lenders. The more money left in your balance, the more interest you’ll have to pay on it. This is money that could go to much more important purchases. So, if possible, try to pay your balance in full every month.

Not Requesting Your Credit Reports

It’s still surprising to see how many people have never seen a copy of their credit report. But, if you were intending to apply for credit or were uncertain about your credit situation, we suggest you get a statutory copy of your credit report from all three major credit agencies: Equifax, CallCredit, and Experian.
Your first copy will only cost you £2, so it’s well worth it. Not only will you be able to get a snapshot of your credit history, but you’ll also be able to see if there are errors and have them corrected. You might also find out that a particular charge you thought you had was removed because it was past the statute of limitations.
Understanding credit is important if you want to be able to stay on top of your finances and use credit the way it was intended. By avoiding these mistakes, you’ll increase your chances to access credit and start to actually improve and build your credit.