Reno, Nevada, is a fast-growing city with a booming economy. However, many residents face financial challenges that impact their credit. Whether you’re trying to buy a home or manage rising living costs, maintaining a strong credit score is crucial. Unfortunately, common credit mistakes can prevent you from achieving your financial goals.
In this article, we’ll discuss the most frequent credit mistakes Reno residents make and provide actionable solutions to help improve your financial future.
1. Maxing Out Credit Cards
The Mistake:
A common mistake is maxing out credit cards. With increasing living costs in Reno, many residents rely heavily on credit cards, leading to high utilization rates.
The Solution:
Keep your credit utilization ratio below 30%. This means you should use less than 30% of your available credit. Pay down balances regularly or make multiple payments throughout the billing cycle to keep this ratio low.
For more tips, visit our Credit Repair Tips page.
2. Missing or Making Late Payments
The Mistake:
Missed or late payments are a significant issue for many Reno residents. Missing even one payment can lower your credit score.
The Solution:
Set up automatic payments or reminders to avoid late payments. If you miss a payment, try to pay it as soon as possible and contact your creditor to discuss options for removing the negative mark from your report.
Learn more about the impact of late payments on your credit score on our FAQ page.
3. Applying for Too Many Credit Accounts
The Mistake:
Applying for multiple credit cards or loans within a short period results in multiple hard inquiries, which can lower your credit score.
The Solution:
Limit your applications to only necessary ones. When you’re rate shopping for a loan, try to keep inquiries within a 14-45 day window, as these may be treated as a single inquiry by credit bureaus.
4. Closing Old Credit Accounts
The Mistake:
Closing old accounts after paying off debt seems like a good idea, but it can reduce your available credit and shorten your credit history.
The Solution:
Keep older accounts open and occasionally use them for small purchases to maintain a good credit history and utilization ratio.
Read more about common credit misconceptions on our Credit Myths Blog.
5. Ignoring Credit Report Errors
The Mistake:
Many people fail to check their credit reports regularly, which means errors such as incorrect late payments or wrong balances go unnoticed.
The Solution:
Request your free annual credit report and review it for errors. If you spot a mistake, file a dispute with the credit bureau to have it corrected.
Learn how to dispute credit report errors with our step-by-step guide on our Dispute Errors Page.