Bad credit is much easier to get into than keeping good credit or applying for a secured bad credit personal loan. After all, the way that most people end up with ruining their credit is when an emergency spend comes up and they have to use their credit cards for something unforeseen and unavoidable. Others will ruin their credit by spending on credit cards as if it’s free money.
The third most common credit killer is purchasing a big-ticket item that you can’t pay on time for. You may not have meant to do it that way but it turned out that way because something caused a loss of income and took your ability to pay away. Then, the last common credit killing event is identity theft.
Protecting your Credit
There are ways to avoid most if not all of these because believe it or not, you are in control of most of it. Here’s how to avoid the pitfalls and protect the credit. First, remember that credit cards are not free money. You have to have income in order to pay off the debt and it will only get worse if you only pay off the minimum. Second, have one card for emergencies only and don’t let it be an AMEX because the payment is due in a month in full. Make sure you don’t get yourself roped into payments if you won’t be able to pay for it while you are replacing the lost income source. Remember when you do have a contract that the interest becomes the killer. Make sure you check your credit report every couple of months or more regularly so that you can keep track of your score and activity and learn to avoid large interest rates.
A Little known Credit Secret
The one thing you could do is to ask the credit bureaus to put a fraud alert on your credit reports. This makes one restriction for you though but it still may be worth it. The restriction is, you have to have a vendor or company call you on your home line to ask you security questions before you can open any account that requires credit. This may be a little bit inconvenient but it serves a dual beneficial purpose too.
It’s a good incentive to not sign up for quite so many contracts with payments that could hurt your credit, not to mention you get dinged each time they check it. The other benefit is you don’t go through hell when you have to prove that you didn’t do what the identity thief did on your credit. It truly is a nightmare you don’t want to have happen.
You can certainly remove it later on but you’ll probably forget about it in time. However, you’ll want to renew it yearly too.