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Have you ever driven home from work and then not remembered a thing about your drive? Have you ever stepped on the scale and wondered how those extra pounds appeared?

Blame it on habits. Habits are those activities we do unconsciously because we’ve done them so many times before. We’re not even fully aware when we’re doing them, and then the results tend to pile up unseen.

Of course, credit is one of those things that can suffer from bad habits. So let’s take a look at five bad habits that can wreck your credit:

1. Charging Everything to Your Credit Card.

It’s easy to break out the plastic and charge everything. After all, it’s hard to remember to get cash from the machine and there are so many cards in our wallets anyway. But paying for everything by credit card is a way to run up the charges without realizing it, and the monthly statement is almost always a shock. If you want to take advantage of credit card rewards by charging everything, make sure you check your accounts frequently so your statement doesn’t catch you off-guard.

2. Buying Discounted Items (Even When You Don’t Need Them).

We’re hardwired to love a deal and we sometimes buy discounted items because we might need them in the future. But just because something is “on sale” doesn’t mean you should buy it. The key is: Can you pay it off on time? If you don’t, any credit card interest you owe on the outstanding amount will invariably erase any discount you might have had.

3. Putting Aside Bills to Deal With Later.

When you get a bill in the mail, deal with it right away. (I advise clients to open their envelope, pay the bill and then file it immediately). But this only works if you’ve set a budget and know when your bills come in. Often what happens is, bills flow in, they get stuffed into one overwhelming pile, and then you have to sort through your bills to figure out what happened that month and how you’re going to pay them all. And if you’re not careful, some of those bills might not be dealt with until after their due date (which has one of the biggest negative impacts on your credit).

4. Applying for Credit Whenever You Get an Offer.

When you respond to every credit card or retail card offer, your credit is hit with an inquiry. Too many inquiries can drive your credit score down. Instead, you should try to get credit only when you need it or when you know you need to build more healthy credit. Do not just say yes to all offers.

5. Complacency.

This is the worst habit of them all because it’s so hard to spot. When someone feels that working on their credit is simply too much work, or they avoid dealing with some of the short-term unpleasant realities of their credit report, then they have the bad habit of complacency. This bad habit ignores the risks and accepts whatever may happen – which will inevitably lead to a lower credit score. (Hint: This is the first and most important bad habit to fix!)

One of the best things you can do is start to identify some of your bad habits that are impacting your credit and start to eradicate them. Keeping tabs on your credit is an important part of that process. You can check your credit score using a free tool like Credit.com’s Credit Report Card, which gives you your score plus a breakdown of the major components of your credit score (payment history, credit usage, length of credit history, mix of credit and new credit) to see what areas you need to work on. And it’s equally important to check your credit reports, which you can get for free every year. Remember: Good credit habits lead to good credit history and a good credit history has a positive impact on your credit score.

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  • Kathy Sandru

    I disagree because you know that the 3 credit reporting agencies rarely, if ever, follow up on disputes. The whole credit reporting process needs a complete overhaul. Too many people have been denied jobs due to long-term unemployment, and credit checks are the reason.

    • http://www.credit.com/ Credit.com Credit Experts

      The dispute process can be time consuming (it can take 30-45 days for the bureaus to investigate and resolve a dispute) but by law, they HAVE to followup on disputes and investigate them. If not, they’re breaking the laws under the FCRA and in which case, you can seek legal action with the help of a consumer law attorney. Another option if you’re having trouble getting a dispute resolved is to file a complaint with the Consumer Financial Protection Bureau (http://www.consumerfinance.gov) in conjunction with your credit report dispute. Hope this helps!

    • Brad

      If you have a legitimate complaint and you have documentation from the company filing the report (e.g. you paid off the card, the missed payment wasn’t actually missed, or you closed the card and it hasn’t shown up as closed) you can get an immediate rescore, it just costs like 20 bucks. They will follow up, but like any enterprise, they have limited resources.

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