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5 Financial Errors Damaging Your Credit Scores

Mon, Oct. 09, 2017 Posted: 08:42 AM

Financial errors are related to manual and digital errors occurring in financial statements. These
errors often impact the credit scores as errors in financial statement, affecting the balance sheet
of credit cards. Here are some common errors which can damage your credit score.

1. Late payments

An on-time payment consists of 35 percent of credit score, but that does not mean that one
delayed payment will disturb your credit score. Nevertheless, if you have a history of late
payments, you will suffer badly through it. Same is the case with balance sheet error of late
payments. If a payment is marked by mistake as late in the balance sheet, it will not be reverted
till the person requests the bank to ‘fix my credit’. The person in this scenario should remain
vigilant and asked the bank authorities to revert his balance statement after rectifying the errors.

2. Increasing Debt Ratio

If you start utilizing balances more frequently, there is a chance of lower credit scores because a
ratio should be maintained between revolving credit and consumption of credit. Financial error is
also possible in this case if the bank is using the manual system of making a financial statement
because of sudden spikes in credit utilization. This error should be kept in mind because it could
further impact the credit scores. You must maintain a check on financial statements in order to
avoid this error.

3. Payment of Liens

You must avoid liens as they are a reason behind lower credit score. Unfortunately, there is no
solution for lien rather it worth a little amount. These are attached to your balance statement and
ultimately affect your credit scores. Liens should be paid off immediately in order to avoid any
future hassle. Sudden payments of liens can cause a financial error because either the payment is
not recorded or either the entry is delayed. It should be kept in mind to check the balance
statement after payment of lien.

4. Closing cards with remaining balances

If you have a habit of closing cards without clearing remaining balances, you are possibly
affecting your credit scores. You must clear all your dues before closing an account and also
check the balance statement I order to avoid any possible future discrepancies. Your closing
account might have some financial error that could later affect your credit score.

5. Ignoring the inaccuracies

Sometimes there are errors which are ignored by people, but later these errors become the sole
cause of lower credit score. Hence, balance statement should be requested every week or once in
a month from the bank, in order to avoid any financial error related to humans or machines. If an
error is ignored, it could become a potential risk in the near future and could have problems
regarding credit scores.

Financial errors could happen by both humans and machines. Therefore, the account holder is
liable to keep the track of his money consumed or saved. He should also request for a weekly
balance statement from the bank so as to avoid further hassle.

Addie Davison