There are many ways where you can make credit mistakes which can harm your credit score at times mildly and at times severely. It is important that you are aware of the common mistakes frequently committed and which can be avoided so that you can escape from the frustration, tension and save huge amount of money. The more you are aware of the mistakes and have enough information about the credit scores, the better you will be able to handle your finances and credit scores. Some of the common mistakes that can harm your credit score drastically are:

1. Discontinuation of credit card by closing it is one the most common mistakes. It can drastically affect your credit score. This is because the main factor in analysing your credit scores is to identify the duration of the credit history. Even if you have stopped using your credit card, it is better to retain it. One of the reasons for this is that they will be removed from your credit report and under federal law, if it not used for over seven years then it will be removed from the report. It is better to use these cards once in few months for small purchases and clear the payment at the earliest. It is also helpful to keep cards active as the credit score is dependent upon the extent of utilization. Thus even if it is a credit card which is not used much, it can actually help you in your credit score to it is important that you do not close credit cards.
2. The next most frequent credit mistake is that of missing payments. This can affect your credit score substantially as the credit bureaus keep a record of your credit history and more often you miss the payment, the more damage it can cause to your credit history. The damage in the credit score can last up to about seven years. The credit score is dependent on frequency of missed payments as well as the severity of late payment which is over 90 days late or more.
3. Settling on past-due or collection accounts is another credit mistake. This is common when a smaller amount is paid on a credit card amount which is severely overdue in order to close the account. This is usually reported by the lender company to the credit bureaus and this is going to affect the credit score drastically.
4. Another common credit mistake is having high credit card balances. It is considered to be good credit score if the credit card balances are between 25% and 40% of the credit limit. If you get closer to the available limit, then your credit scores will definitely be affected. So, it is advisable to keep the balance on the lower side of the credit limit.
5. Inquiries can also result in bad credit score as every time you make an inquiry about your credit, then it indicates that the credit bureaus have asked for a copy of your credit report. A few inquiries is fine, however, many inquires can damage the credit scores as they are in the opinion that you have greater credit risks. Thus it is better to have lesser inquiries by opting for credit only when there is a need for it.
6. Don’t assume that all credit scores are the same. There are many credit bureaus and also different types of credit scores too. It is important for you to understand that the common credit score is the deciding factor on how much is the risk factor. The higher the score, the higher is the risk.
7. It is also a common mistake to be under the belief that all credit scores give same kind of information.
8. Most often a mistake is committed when you are not aware of your credit rights. You need to see the assistance of the Federal Fair Credit Reporting Act, or FCRA which are implemented to protect your rights.
9. Most people are ignorant of the fact that there are three credit bureaus Equifax, Experian and TransUnion which are individual businesses who operate for profit. You need to be aware that each one holds information on you which might not be same always.
10. Though credit scores cause lot of problem, not having any credit or a credit score is also a mistake. Credit scores help in analyzing your credit history so it important to have it. It helps in developing your credit worthiness if you are able to manage your credits effectively.

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