Three little numbers have a major influence on your financial life.

Yes, we’re talking about your credit score.

Your credit score is a number from 300 to 850 that basically signals to banks, employers and lenders how responsible you are with your money. Having a low credit score means it may be harder to get the best rate on loans, meaning you pay more to borrow money.

Unfortunately, there are a lot of misconceptions about your credit score. Here, we’re taking a look at 5 mistakes people make when using their credit and how to avoid these pitfalls and keep your credit score up (or raise it if you need to).

5 Mistakes People Make with Credit

Paying Just the Minimum
Maybe you spent $200 on a certain credit card last month, but when the bill arrives, your minimum payment is just $80. If you only pay the minimum, the bank will charge interest on the other $120. When the bill arrives next month, the $120 you didn’t pay will cost you $140 or more. You just spent an extra $20 because of interest, and it can hurt your credit score if you routinely carry large balances on your credit cards. Do everything you can to pay your credit cards off every month by being careful about how much you spend.

Not Looking at Transactions
Sometimes, credit card fraud does happen. It’s easiest to correct if you catch it quickly, but that means you really should take a good look at each credit card bill. Do all of the transactions on that bill seem familiar? If you see a transaction on your credit card statement that you did not authorize, call your credit card company immediately.

Paying a Credit Repair Company to ‘Fix’ Your Credit
If your credit score is low, there are a lot of things you can do to raise it — and you don’t have to pay anyone to help you! Be sure to get your free credit report from AnnualCreditReport.com. If there are mistakes on it, call the banks or institutions involved and get those straightened out. Then, make sure you pay all of your bills on time, every month. (We recommend watching our webinar replay “Understanding Your Credit Report and Score” — it can help you understand a lot about how your payment history affects your credit score and how to raise that score!)

‘Maxing Out’ Your Credit Card
A credit card company may give you a spending limit of $1,000 or $5,000 or more. That doesn’t mean you should spend it all! Part of your credit score is based on the ratio of available credit to the credit that you’ve used up. Try to keep your credit card balances low and paid off on time.

Using the Wrong Credit Card
There are a lot of credit cards out there, and each has different benefits and perks. Be sure to take a look at the programs and benefits for every card you have so that you can make good decisions about which card to use for which purchase. You may get certain benefits from one card for travel-related purchases, and different benefits on another card, like cash back, for groceries. Learn the programs and reap the rewards!

In addition to watching our webinar replay “Understanding Your Credit Report and Score," we also recommend watching the replay of the “Paying Down Debt” webinar.

And since CommonWealth One is here For You, For Life, remember that we always offer free counseling services to help you with everything from your budget to your credit score, loans, investments and more. Don’t hesitate to reach out through online banking, call us or stop by a branch!