"You pay the biggest price for not paying on time and having the biggest credit balances," said investment adviser David Anderson.
Pay your bills and don't max out your credit cards. Two good rules of thumb, but add applying for credit too many times to that list.
Shopping for anything from cell phones to cars can hurt your credit score. According to the credit card companies timing is everything.
The problem is credit card companies see the world a little differently. If you apply for a loan on six cars in one month then clearly it's apparent your applying to buy one car. But, if you stretch out the loan applications to six months, credit companies might think you're applying for six cars which is when your credit takes a dive."
Six cars mights seem crazy, but it's possible if you don't apply for all your loans in about a 30-day period.
There are more ways you can hurt your credit score.
Small unpaid debts like parking tickets can be turned over to collection agencies. Too many lines of credit in your name can be damaging so be careful signing up for a department store card just to get that discount.
It's a slippery slope and one mistake can cost you.
"You can work for years to get a good credit score and not pay your bill once or twice and that can have a huge effect on your credit score," said Anderson.
So do your homework. Get your credit score, check your report for accuracy and don't be afraid to dispute inaccuracies. Pay your bills and limit your spending on new credit lines.
