Precautions to avoid bad credit history


ADVERTISING DISCLOSURE: is an independent, advertising-supported web site. receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Building Credit History » Precautions to avoid bad credit history

Precautions to avoid bad credit history

Updated: December 26, 2012

The content is accurate at the time of publication and is subject to change.
It is often said that a stitch in time saves nine. There are a lot of credit card customers who end up in debt and large outstanding dues simply because they have been careless and reckless with their finances. Prevention is better than cure, which is why you need to follow some simple steps to avoid creating a bad credit history. Bad credit history for a customer means that he or she is not quite creditworthy from the credit card issuers perspective. This may lead to high interest rates on credit cards and loans and less rewards. Here are the 5 precautions you need to take to avoid bad credit history. Don't miss bill payments This is the golden rule that is often repeated when it comes to maintaining a good credit history. Whether it is your phone bill, electricity bill, internet bill, mortgages, monthly payments for loans or credit card bills, you must ensure that you don't miss the deadlines for the bill payments for any of these. Every missed bill payment affects your credit history negatively and while you casually forget the billing cycles, you might realize one fine day that your credit history, in spite of your income and expenditure and financial condition, is not as good as it should have been. A good idea is to set auto payments of most of the bills from your credit card and then keeping a reminder to pay off the credit card bills on time. Don't push your credit limit Most credit card companies do not give you any reminder that you are nearing your credit limit or you have crossed it. You will simply be charged with the overdraft fees, although, according to the new rules you need to sign up for this. Whatever be the case, your outstanding balance shouldn't go close to your credit limit as it doesn't augur well for your credit rating. Your dues should be as low as possible and should be cleared away every month. Don't keep a revolving debt It is a common temptation to spend money on something, thinking you can always pay for it next time. The average credit card debt in America is in excess of 2000 dollars. If people were wary of keeping revolving debt, this situation wouldn't have risen. Revolving debt should be best avoided to stop charging on your credit card, the moment you feel you don't have enough to pay off the bill later. That way you will save on the extra interest which you would have paid on the revolving debt. Don't spend to avail rewards Rewards as the term suggests are programs to reward you for your expenses and give you something as a token of appreciation. Many card issuers use it like a marketing strategy. You must not go out of your way to spend in order to avail these rewards. Don't keep closing credit cards A long history is important for a good credit rating. If you keep closing your credit card accounts you will lose the advantage of a long credit history.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Top 5 Cards for Travel from Our Partners: Summer 2018 – Expert’s Choice

Top 5 Cards for Travel from Our Partners: Summer 2018 – Expert’s Choice

Posted: February 12, 2018

The sun shines more and more each day, flowers are in bloom and you already feel how hot it is getting - summer is here. Summer holidays are almost here, and you are in need of dire preparation. You can lift in spirits and let CreditLand ... Continue reading
Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Posted: February 10, 2018

If you're trying to find the perfect rewards credit card, you might feel like you're drowning in options. There are just so many out there, and many of them look similar. This can make it tough to decide on a card. One thing people often ... Continue reading
Price Protection: Credit Cards That Will Refund a Price Drop

Price Protection: Credit Cards That Will Refund a Price Drop

Posted: February 8, 2018

Those who often find themselves buying stuff and then discovering that they could pay less for the same item they've just bought, will appreciate this credit card benefit – price protection. This is the least known and the most neglected ... Continue reading
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!