On the surface, it seems like Americans do a good job of managing their credit. After all, nearly 60% of people now carry a credit score of 700 or better. Of course, a good credit score doesn’t mean you don’t make credit management mistakes.

Credit management is about more than score. It’s about your overall financial health. If you spend most of your money paying your bills each month, you might enjoy a high credit score without enjoying healthy finances.

If you’re working on improving your credit but don’t want to end up in a financial bind anyway, keep reading for six common credit management mistakes and how to avoid them.

1. Missing or Late Payments

Missing payments or making late payments is a catastrophe for your overall credit score. Payment history is a huge factor in your overall credit score, making up over 30 percent of your final score. Develop a budget so you always have the cash on hand to pay bills when they’re due.

2. You Don’t Check Your Credit Report

With so much financial chaos coming out of the Covid pandemic, a lot of people may not even realize that a negative item showed up on their credit report. You must know what’s on that report if you’re going to fix it. The good news is that you can get that report from the credit bureaus, for free, once a year.

3. High Credit Card Debt

Carrying credit card debt that approaches your credit limit looks bad on your report. If improving your credit score is a big deal for you, look at paying down debt on some of those cards.

4. Lots of Credit Applications

A lot of credit applications read as a sign that you’re in financial trouble to the credit bureaus, banks, and credit card companies. It also drives down your score. Only apply for credit when you need it.

5. Frivolous Buying

Too many people treat a credit card like it’s cash in hand. It’s not. You’re borrowing against your future paychecks.

Only use credit cards for essential purchases with the monthly payment worked into your budget.

6. Not Seeking Help

While you can often negotiate with companies that extend you credit, it won’t matter much if you end up in over your head. At that point, you need professional help from a credit repair service, such as Pinnacle Credit Management. These companies help you work out plans that work within your finances.

Credit Management Mistakes and You

Anyone can make credit management mistakes. The good news is that most people can also recover from these mistakes with effort and careful planning.

The most important weapon in avoiding credit mistakes is information. Get a copy of your credit report so you know what you’re dealing with financially. Create a budget so you know what financial resources are at your disposal.

Once you know those crucial pieces, work on a plan to repair any mistakes.

Looking for more tips on getting your personal finances in order? Check out our articles with the “money” tag.