We all make mistakes. But when it comes to our credit, we need to be especially careful because that one slip-up can damage our credit for years to come. Here are seven mistakes that can put your credit on a downward spiral.1. You Forget to Make a Payment
Forgot about that bill? Your oversight can cost you a lot more than a late fee, it can also have a significant negative impact on your credit score. It feels very unfair to be saddled with a seven-year black mark on your credit reports for a single mistake, but it happens. (Fortunately, most lenders though not all won't report a late payment until you are 30 days late. So if you remember to pay the bill before the next one is due you might be OK.)2. A Medical Bill Slips Through the Cracks
Maybe you got a medical bill but thought your insurance was going to take care of it. Or maybe you never did get the bill. Either way, a medical bill that winds up on your credit report can wreak havoc on your score. At one seminar I gave not long ago, a participant told me a medical collection account triggered a drop in her score of more than 100 points! How medical bills impact your credit will change somewhat in the future as the result of changes in newer scoring models, along with an agreement reached by 31 state attorneys general and the credit reporting agencies that will help prevent these accounts from being turned over to collections prematurely. But still, try to be extra vigilant about getting, reviewing, disputing or paying your bills after you receive medical care.Is Your Credit Lender-Ready?Find out where you stand with a FREE summary of your credit report and 2 FREE credit scores, updated each month. Know what your lender will see before you apply.
Get Started Now 3. You Refuse to Pay a Bill On Principal
Maybe you felt you were overcharged on a bill. Or you're ticked off because you don't feel a dentist/doctor/mechanic or other professional did a good job. Perhaps you had a run in with your landlord. Whatever the reason, you refuse to pay a bill. While it may feel good to stand your ground, if the provider you wont pay reports to the credit reporting agencies, or turns the bill over to collections, you may not feel the same way when that same item keeps hurting your ability to get credit at a decent rate in the future. (Heres how to remove collections from your credit reports, though its not necessarily easy or guaranteed.)
Sure, there are times when it makes sense to withhold payment. But there are also times when the better strategy is to just pay the bill to protect your credit rating. If the amount of money involved is large, or you really want to fight it, consider taking the provider to small claims court or filing complaints with the Better Business Bureau, Consumer Financial Protection Bureau, your state attorney general, etc., after the fact. (Of course, at times it will make sense to discuss the appropriate strategy with a consumer law attorney first.)
Most people who co-sign do so out of a sense of obligation (think kid's or grandkid's student loans) or kindness (think boyfriend's car loan). And many times it's not a problem. But we've heard so many co-signing horror stories in the Credit.com blog comments that we know things don't always go as planned. Even if the bills are paid on time, the additional debt may affect the co-signer's credit scores or debt-to-income ratio, and make it impossible to get a loan themselves. And when the bills aren't paid, the co-signer is stuck with bad credit and bills to pay.
Maxing out a credit card could cost you as many as 45 points (sometimes more), according to FICO, even if the amount you owe is small. It's not so much the amount that matters, as how close your balance puts you to your credit limit. Your debt usage ratio compares your reported balances to your credit limits, and higher ratios can affect your scores. Fortunately this one's relatively easy to fix if you can come up with the cash to do so. Just pay down your balance, preferably a few days before the statement closing date, so the reported balance is lower.6. You Close Out All Your Old Accounts
It's a common instinct to want to close old accounts you don't use any more. Though more and more people seem to be aware that doing so may have a negative impact on their scores, I still find that many people are worried these unused accounts could be used by credit crooks, or they just want to "tidy up" their finances. While closing an unused account you really don't want (or that charges you an annual fee) every once in a while may be fine, resist the urge to close all the ones you don't use. You're more likely to see your credit scores go down than up if you do.See Where You StandSign up at Credit.com and get your FREE credit score report card. Plus see how you compare to others. FREE updated every 30 days.
Get Started Now 7. You Assume Everything's Fine
This is perhaps one of the biggest mistakes we tend to make with our credit. I've been guilty of it, too. Because you pay your bills on time, you assume your credit is fine. In a survey by Credit.com earlier this year, 29% of those who had not checked their credit reports cited that as a reason why. (Or maybe you know it's not good, and you'd just rather not take a look.) But of those who did review their reports, 21% found a mistake, 9% discovered a late payment they didn't know about, and one in 10 found a collection account they weren't aware of.
All of the mistakes we described here can cause a significant drop to your credit scores. It matters because consumers with the best credit scores can save significantly on auto and homeowners insurance, as well as on interest cost for their credit cards, auto loans and mortgages. And the savings can add up quickly. One recent study, for example, found that across the US consumers with fair credit pay a little more than 30% more for homeowners insurance when compared to those with excellent credit, and those with poor credit can pay twice as much! You can use this lifetime cost of debt calculator to see how much you can save by boosting your credit scores.
This last mistake is the easiest to fix. It won't cost you anything and will take a few minutes of your time. If you haven't done so already, get your free credit reports from each of the major credit reporting agencies, and then review your free credit score (you can see two of your credit scores for free on Credit.com) on a regular basis so if problems do crop up, you'll know. And if youre wondering, will checking my credit score hurt my credit? the answer is no, as long as you get it yourself and dont ask a lender to pull it for you.
As for me, I set up auto-pay on most of my accounts, and requested paper bills or set up online alerts for the rest. Hopefully, I've learned my lesson and wont make that mistake twice.More on Credit Reports amp; Credit Scores:
- The Credit.com Credit Reports Learning Center
- What's a Good Credit Score?
- How to Get Your Free Annual Credit Report
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Last May, Taylor Swift opened her "1989" concert tour at CenturyLink Center in Bossier City. What some excited fans didn't expect was being stopped at the door for having fake admission tickets.
Rebecca Bonnevier, CenturyLink's general manager, said it was "heartbreaking" to witness the fans' disappointment, knowing they lost their money to a ticket scalper. To enter the concert, they chose to pay an additional $500 for legitimate tickets at the facility's box office.
"If someone comes to the venue with a ticket that's not a genuine ticket, they can't get admittance into the building," Bonnevier said. "So whatever they've paid for the ticket is basically a contribution to someone else's pocketbook."
If the box office still has tickets available, Bonnevier said the person can purchase them , but options for seating are limited.
Third party ticket selling websites often are used to get the best deal or access to a sold out show. But beware -- it's risky business.
Attorney General James D. "Buddy" Caldwell recently released a consumer alert cautioning event-goers of the scams.
"Consumers lose millions of dollars each year to con artists selling phony tickets or through illegal ticket sales," said Attorney General Caldwell in the consumer alert. "Unfortunately, ticket trickery can happen at sporting events, concerts, plays and theme parks, so buyers should beware."
Jake Wood, co-founder of RocketPup Creative, an advertising and event managing company that helps agencies find ticketing partners, said scammers make copies of original tickets to sell multiple times.
"The ticket could very well be a legitimate ticket but it's just been copied," he said.
Wood has worked in the entertainment industry for five years and in March wrote a column for The Times about ticket scalping during his tenure as the director and sales and marketing at CenturyLink in Bossier City. In the column, Wood said, "When ticket purchasers venture into the uncharted waters of third-party ticket brokers, troubles often begin to manifest."
He also discussed various scam techniques, including ticket duplication, the selling of tickets for more than face value and speculative ticketing -- the selling of event tickets before they are officially on sale.
"They try to sell the ticket before tickets exist or go on sell. They're selling pieces of paper and hoping they receive something comparable," he said.
Ticket scams directly affect the consumer who loses money, may be susceptible to credit card fraud and may miss attending the desired event. Scammers put the hosting venue's reputation at risk, which could cost it future customers.
"When something goes wrong you're going to be upset with the facility because they were the ones you're having a negative interaction with," Wood said.
The effort to prevent scams is a never-ending, uphill battle for credible ticket sources. Ticket scalping isn't just a physical person offering tickets outside of a venue -- scalpers are often faceless online.
Ticket scams are made easier and faster when scalpers use computer programs that can break through a ticketing website's security firewalls that prevent excessive ticket buying. The firewalls require the consumer to provide verification codes and passwords only humans can answer, so the site doesn't sell to a "robot."
"We make security measures better and they find a way around it," Wood said. "It's back and forth, all in the effort of trying to provide fair access to the ticket buyers."
Cut the risks, buy legit
The Better Business Bureau reported more than 2,000 complaints nationwide in 2014 against event ticket sales and ticket brokers alleging foul practice, including invalid or undelivered tickets.
The best thing to do to ensure a good deal its purchase directly from the facility's box office, Bonnevier said. CenturyLink partners exclusively with Ticketmaster for in-person, phone and online ticket services.
Tickets personally purchased and printed online have unique barcodes that Bonnevier said will only allow one event entry at the door.
"If you buy a ticket other than through Ticketmaster you're taking a risk it's not a real ticket or it may be a price higher than face value," Bonnevier said. "Ticketmaster has a number of insurances that your ticket is real, including the ticket stock it's printed on."
Buyer Beware: Tips for safe ticket purchases
Ticket scams include, but are not limited to:
oSelling a ticket multiple times
oCharging a ticket for more than face value
oSpeculative ticketing/selling non-existent tickets
To avoid being caught in a bad ticket deal, state Attorney General Buddy Caldwell advises ticket buyers:
oStick with reputable ticket resellers and ticket brokers who guarantee that the tickets they sell are authentic and that they will deliver the correct tickets in time for the event.
oBefore clicking on an online vendor's website, copy-and-paste its address on an online search engine and see what results come up. This can help you get wind of possible computer malware being installed on your computer if you click on the link, or warnings about deceptive sales from past customers.
oBe sure the purchase page address begins with https://, indicating the site is encrypted to protect your credit card information.
oVisit the website for the National Association of Ticket Brokers (NATB) at www.natb.org, whose members must guarantee every ticket sold on their websites and provide a double-money-back refund if tickets are not delivered.
oCheck guarantee policies. Even if vendors aren't NATB members, they still should post on their websites policies that guarantee refunds if the event is canceled, you receive invalid or wrong-date tickets, or don't get them at all. Be wary of websites without such stated policies.
oKnow the fees. Legitimate online ticket sellers can (and often do) charge service, shipping or other fees. Although they should be disclosed upfront, they may not be revealed until the "checkout" page. So keep tabs on your subtotal throughout the buying process; it can change.
oPay by credit card. Credit cards give you protections that other methods of payment may not. If there's a problem, you have the right to dispute charges and temporarily withhold payment while your dispute is investigated.
oNever wire money to buy tickets. If something goes wrong with the transaction, you'll have no way to get your money back. Once you wire money, it's gone forever.
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