There are some common mistakes that consumers make when it comes to handling their credit. These mistakes are financial ones and often involve transactions or agreements on financial terms and the keeping or breaking of them. I have explained 3 of the popular ones for you here.

• Late Payments: When a loan given to you is due for repayment, your creditor expects you to honor it based on an earlier agreement on the loan. However, nonpayment of loans on time attracts severe penalties that may take up to seven years to erase in some cases. Though a late payment is not reported to the information bureaus until 30 days after the due date for payment, nevertheless, you must adhere strictly to the terms of the loan to avoid bad debt and its consequences on your rating.

• Incessant Loan Applications: Making persistent requests for financial help incurs trouble. If you are in the habit of knocking the doors of money lenders for loan, you should desist from such as these financial institutions will report you to the information officers at the records bureau notifying them of your desperate need for cash. This way, you will be passing message across that you are constantly running broke and perhaps, have problems managing money.

• Abuse of Credit Cards: If you have got a card or two, try keeping your spending activities to a reasonable minimum. By reasonable minimum, I mean within the range of 20 to 30 percent of the total limit provided to you. Your card provider will inform the bureaus of your pattern of usage on your cards, and the bureau will make interpretations of these in your score. A pattern that shows you are constantly hitting the roof of your card will be inferred to be extravagant and as such, you will be courting deductions from your score.

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