What is the primary mistake credit consumers make?

There are too many consumers who don't pay their credit card bills in full each month, and they do not understand the after-effects of making only minimum payments. The main disadvantage of paying just the minimum is that you actually land up paying much more than the item’s original cost in the market. So, that is not at all helpful.


So, how do we become credit smart?? 5 key steps.


1. Educate yourself – Obviously, I suggest “PAY YOUR BILLS,” but there are many additional excellent books, TV programs, and websites out there as well. Once you are armed with information on how to maintain good credit, it’s much easier and much more fun to make financial decisions and conduct day-to-day finances.



2. Pay bills on time and pay off credit card balances in full each month – On-time payments are very important to good credit. Paying bills on time for as little as one month can raise a modest credit score by 20 points. If you can't even make minimum payments, call creditors and ask for temporary hardship status. Some creditors will work out payment plans.



3. Understand, monitor, improve, and maintain your credit score – Basically, it comes down to whether you pay, and pay on time, and whether creditors have reason to believe you might be overextending yourself. The more responsible you are with credit, the better your score will be.