According to a new survey from Credit Karma, about 70% of Americans are likely to make a serious financial mistake that negatively impacts on their credit score before they celebrate their 30th birthday. Among the most common mistakes include missing a payment on a credit card or loan so that the overdue account is sent to a collection agency.
Many individuals make the mistake of charging more than they can realistically handle and this results into damage to the credit score. Before you can get a mortgage or a car loan, the financing company makes a credit check to assess the ability to pay. Sometimes the mistake is due to uncontrollable circumstances like losing a job. However, 40% of people blame the mistake partly on their irresponsibility. There is complete lack of education on credit. Credit is not something that should be considered when you buy a car; it is an adult’s responsibility.
At least three quarters of Americans consider that better financial education could have prevented them from making a mistake. Many think that managing their finances will be better once they reach 30 because of the experience gained but in many cases, the first mistake was already committed. This is particularly true for those who have defaulted on their loans or had an account sent to a collection agency. The mistake can linger on the credit score for at least 7 years and there is a very likely chance for a rejection of credit card application, auto loan or mortgage.
The sheer number of Americans who have run into trouble is increasing. The most important thing is to ensure that the accounts are in good standing by paying bills and credit cards on time. To ensure monthly payments, do not maximize the credit card. For example, if you have a credit limit of $1,000 charge no more than $300 to avoid the high cost of interest payments.
CreditCard.info is your source for information on credit cards. It offers a guide on how to move the balance from a high interest card to something that is more manageable to save money. CreditCard.info also offers advice on the best rates, rewards and spending limits.