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5 sure-fire ways to ruin your credit

The ability to "charge it!" is as American as hot dogs, apple pie and baseball. Credit is issued with the understanding that you'll use it wisely and make payments in a timely manner. Unfortunately, it's easy to mess up the relationship. Avoid these habits.

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1. Charge away! Don't worry about credit limits.
Get ready to pay penalty fees and wreck your credit by going over the credit limit. Plus, you could face a double whammy -- one misstep on a credit card often leads to rate hikes on other accounts. There's no room for credit errors today. You're better off giving your credit card debt the "payment push."

2. Mail payments late. What's a few days between friends?
Nope, the creditor is not your friend. Don't expect a late payment to be forgiven or forgotten. It will cost you. With late fees climbing higher, it's best to play this relationship by the rules -- send your payment on time. Here's how. Plus, here are 20 more sneaky ways you can get burned in this relationship.

3. Charge to better your lifestyle. I like my neighbors' new ...
Wave the red flag in front of your face. Don't use credit to keep up with your neighbors. And, in this low-interest environment, your resolve must be extra-strength. Why? These super-low interest rates are aimed at getting you to buy more. Plus: Take care with your zero-percent credit card.

4. Never check your credit report.
Your credit report impacts the interest rate you'll be charged on credit cards, auto loans, mortgages and even insurances. In some cases, your credit report determines whether you can rent an apartment or get employment. Make sure yours speaks highly of you! Here's how to read and understand your credit report. Need to clean it up? Read: 5 steps to do-it-yourself credit repair.

5. Be careless with your identity.
Nobody ever expects it. According to a 2005 survey from the Better Business Bureau and Javelin Strategy and Research, within the last 12 months, nearly 9.3 million Americans discovered they were identity theft victims. The cost: damaged credit records, $5,686 in out-of pocket expenses per individual, plus an average of 28 lost hours in resolution time. Reduce the risk of it happening to you. Plus: 14 ways to avoid identity theft


Bankrate.com's corrections policy
-- Posted: Nov. 1, 2005

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