Consumers Beware: "Credit Killers"

More and more consumers are depending on their good credit to make ends meet as budgets get tighter as a result of rising gas prices and higher minimum payments. However, your credit score may be affecting you more than you think. For example, landlords, insurance companies and employers are now doing credit checks as a way to evaluate your personal financial character.

Credit scores range from 300 to 850 and a score over 700 is generally considered by most creditors to be "good." Unfortunately, reaching that number is not quite as simple as paying bills on time and as agreed. While payment history does account for 30% of your FICO score, there are several other factors that contribute. With this in mind, the experts at Union Plus Credit Counseling, provided by Money Management International, would like to point out a few common credit mistakes and ways to avoid damage:

Not checking your credit report regularly. Request a free copy of your credit report each year from www.annualcreditreport.com. Familiarize yourself with your credit history and review it for accuracy. Knowing where you stand will help give you the tools needed to increase your score. The Union Plus myFICO Discount provides additional credit monitoring and tools to help you repair your credit.

Having too many inquiries. Generally, six or more inquiries within a six-month period of time will scare a lender. Applying for loans on the Internet and transferring balances on credit cards can also have negative consequences. However, most credit scores are not affected by multiple inquiries from auto and mortgage lenders within a short period of time.

Staying out of debt. Having no credit history is nearly as bad as having poor credit history. From a creditor's perspective, if you have stayed out of debt your whole life, they have no way to judge how you would handle a loan. Maintaining several types of accounts proves that you can handle responsibility. According to myFICO, your credit mix (credit cards, store charge cards, loans, etc.) accounts for 10% of your score. Keep in mind you do not have to carry balances on your credit cards to build good credit. It's perfectly fine to use them and pay the balance in full each month.

Making late payments. There are several negative consequences to making late payments and the "Universal Default" clause is one of them. Under this clause a creditor may raise your interest rate if you are late on other credit obligations.

Closing old accounts. It may seem wise to close old, unused accounts, but doing so could shorten the length of your credit history and harm your score. Credit history makes up a whopping 15% of your score. If you choose to keep old accounts open, be sure to keep tabs on them regularly to be certain they are not being used fraudulently.

Finally, when trying to improve your credit score, be persistent and patient. Scores are continually updated and may move several points each month. Whether your score goes up or down is entirely up to you.

For more tips, visit myFICO education.