Ways to avoid sabotaging your credit score

It's a three digit number that you rarely see; but it can have a big impact on what kind of house you live in, what type of car you drive, even your job. We're talking about your credit score. You could be chipping away at that number without even knowing it. 


These days it's just as common for employers to check your credit score as it is for them to check your references. A 100 point difference, say 620 instead of 720, can make or break your chances of getting a job and a lot more. 


"The better your score, the better your interest rate's going to be," explained Clarity Financial's Senior Financial Advisor Richard Rosso. "Houses, cars, you're going to save thousands of dollars if your credit report is good." 


Rosso said you may be doing things to sabotage your credit score without even knowing it. Blow off that parking ticket or toll violation and you'll be turned over to collections. In the city of Houston, it happens after 3 written notices and 90 days after your payment is due. How many times has a cashier asked you if you'd like to open a store card to get instant savings on your purchases? What'd you say? 


"Now you think, 'Hey, I'm saving 15%,'" Rosso said. "Think about the impact of that decision." 


Every time you accept that offer, the retailer does a hard credit check. Every hard credit inquiry lowers your score by a few points and they can happen often. Renting a car, signing up for a new cell phone contract or getting a new cable or internet account can all affect your credit score.


When you move, don't forget to send your forwarding address to utility companies, like for water and gas. A lot of people forget to pay that final bill but the company won't forget. They will also send your account to collections; that's another ding on your score. 


Charging too much will also lower your score. Just because you have $10,000 in available credit on your cards doesn't mean you should use it. You want to maintain a good size gap between your available credit and the amount you owe.