Consumer Tips

Take a look at the chart below comparing the difference between making a minimum payment versus making a fixed payment above the minimum.  The example uses a $2,500 credit card balance, a 21% interest rate with a fixed payment of $100. 

Time to pay off:

Making additional payments, or paying more than the minimum, help you to avoid the trap of having credit card balances stretch out for years and years. You can use the Credit Card Calculator to determine how quickly you will pay off your credit card balance, and you can save even more money if you do the following:

• Lower your interest rate. 
  Call your issuer, request a lower interest rate and if they refuse state that you will take your business elsewhere. If they still won't budge, consider transferring your balance to another credit card with a better deal. For instance, an interest rate of 12% with a $2,500 balance and $100 monthly payment will save you an additional $470 in interest. You will also pay off your balance in just under two and a half years.
• Add more money. 
  Even if you can't get a lower interest rate and you continue to make payments at a rate of 21%, adding $20 a month to your $100 monthly payment will allow you to pay off the debt in two years and three months; you will pay just under $637 in interest. Another example, by making payments of $233 a month (at the 21% interest rate) the balance can be paid-off in one year. With a lower interest rate, the balance will be paid down even faster! 

Here are the three other effective ways to tackle credit card debt:

• Pay off the credit card with the lowest balance first.
  This advice is based on the notion that you will feel great about paying off credit cards with small balances, and will be so excited the momentum will carry over to paying off cards with larger balances. By having fewer bills you minimize the possibility of missing payment due dates that can result in late fees or higher penalty interest rates. 
• Pay off the card with the highest interest rate first, regardless of the size of the balance. 
  You will save the most money using this strategy--though your actual savings amount will depend on the interest rate for each account. Start by paying as much as you can toward the card with the highest interest rate, and when you have paid off that card, move on to the next card, and so on. 
• Strategically pay down your balances to improve your credit score. 
  With this method, you look at your available credit lines on each account and you work to reduce each of your balances to below 30% of your available credit, or even lower if you can afford it. This can boost your credit score, since a high balance relative to your credit limit is an important factor in determining your FICO credit score. If you have generous credit lines, you may not need to consider this approach.

It is important to note that you don't have to carry debt to build a strong credit score. When you pay off a card, don't close it (unless there is an annual fee and the issuer won't waive it). Keep it active by using it from time to time for purchases you would make anyway, and pay the balance in full.
 

The median FICO credit score is 723, but FICO scores above 760 are ideal for getting the best credit offers. If your credit score is not as high as you would like, here are five quick ways to help improve it.

1. Pay down credit cards that are close to their credit limits. 
   If you are using more than 30% of your available credit on any individual credit card, your score will likely be brought down by that balance. Try to pay down cards that are getting close to their credit limits as quickly as possible. After you pay off a credit card, do not close the account unless there is an annual fee the card issuer refuses to waive. 
2. Check your credit report and dispute mistakes that may lower your score. 
   Many credit reports contain errors. When you dispute these errors, keep your letter short and to the point, and save a copy for your records. If you request your investigation online, print out a copy of the page before you send it and be sure to note the date you submitted it. Lenders and credit reporting agencies must get back to you within 30 days to tell you whether they are correcting the information or confirming it. 
   
   Remember: don't dispute old accounts that still appear open on your credit report. Doing so may lower your score!
3. Build positive new credit references by using credit (carefully). 
   Many people who have experienced credit problems are scared they will get in trouble if they start using credit again, but avoiding credit altogether can hurt your credit score also. You don't have to carry balances to build credit, but you can use a major credit card from time to time to keep your account active and to build a positive credit reference. Charge things you would buy anyway: groceries, gas, your cable bill, for example, and then pay the balance in full to avoid debt.
4. Pay your bills on time.
   Making a disciplined effort to pay your bills on time each month is one action that will pay off in the long run. You may not see results instantly, but over time, if you keep up good payment habits, you'll find your credit will get stronger.
5. Keep it going. 
   When it comes to building better credit, time does heal the wounds. As negative information becomes older, it has less of an impact on your credit scores, especially if your report lists current, positive credit references. Pay your bills on time, monitor your credit reports for accuracy, and maintain low balances on your credit cards. Not only is that a good way to build better credit, but a good way to manage your financial life as well!

When you are ready to buy or refinance a home, contact Union Plus Mortgage Company, a union-owned company that provides home financing options to union members and their families.

Visit UNIONPLUSMORTGAGE.COM
or call 1-855-UNION-53 (855-864-6653)
to speak with a loan officer

Credit Account "Charge Off"

When you fall far behind on a credit account, the lender will "charge it off." This means it must be treated as bad debt for accounting purposes, and you are still responsible for payment of the bad debt. Usually, the debt will be turned over to a collection agency, which may charge additional fees and interest.

Credit Report Impact

Regarding your credit report, collection or charge-off accounts can be reported for up to seven years and 180 days from the date you miss your first payment leading up to the account being charged off or sent to collections. Here is an example:

• January 1, 2010: You miss a payment and the account becomes delinquent. 
• June 1, 2010: The account is charged off by the lender.
• December 1, 2010: The account is acquired by a collection agency.
• June 29, 2017: The collections account and charge-off must be removed from your credit reports.

Under federal law, the Fair Credit Reporting Act, the collection agency is required to inform the credit reporting bureaus of the original date you, the debtor, fell behind.  The credit reporting bureaus must disclose the date of the account delinquency; in this example the delinquency date is January 1, 2010. 

If the debt is too old to be reported you can dispute the account with the credit reporting bureaus. You should monitor your credit report to make sure it is removed and does not reappear. You can also file a complaint with the Federal Trade Commission http://www.ftc.gov/bcp/index.shtml  that enforces the federal credit laws.

Collection Agency Lawsuit

An account that goes to collections is a negative item whether it is paid or unpaid. The same is true if you settle the debt for less than the full balance. However, if you do not pay a collection account, you run the risk of being sued. If you lose the lawsuit, a judgment will appear on your credit report, which will hurt your credit for another seven years.

That brings up one more issue to consider: whether the collection agency can still successfully sue you to collect your debt. Every state has what's called "statutes of limitations" for debts. The statute of limitations that applies to your debt could last for two years – or twenty years – depending on your type of debt and the state law.

For example, let's say the statute of limitations in your state is four years. The collection agency can attempt to collect payment for debt after four years. However, if the collection agency takes you to court, and you can prove that the debt falls outside the statute of limitations, it is unlikely the collection agency will win the case against you.

Legal Help

To make sure you understand your rights when it comes to collection accounts, you can contact a local consumer law attorney or use the Union Plus Legal Services for help.

• Fact #1: If you contact a credit reporting agency and ask them to remove several old accounts that you don’t use anymore your credit score will likely decrease.
  
  Most people find accounts on their credit report that are listed as open, when in fact they haven't used them for a long time and don't intend to use them again. Credit cards, in particular, are rarely closed unless you specifically ask the lender to close them. You can call or write to the lender (the contact information should be listed on your credit report) and ask them to update your credit report to list the account as closed, and they must do so. Another alternative is to write to the credit reporting agency and ask to have the accounts listed as closed.
  
  But, before you do that, keep in mind you may lower your credit score. If you really want to close out those accounts, do so slowly and selectively. Start with the more recent account, leave the oldest account open, and close retail cards before you closing major credit cards.
• Fact #2: Not all inquiries into your credit history will affect your credit rating. 
  When any company requests your credit report, it creates an inquiry that is listed on the report. By law, the credit reporting agencies have to disclose all inquiries on your credit report when you request it. But, not all inquiries are shown to lenders or used to calculate your credit score.
  
  "Soft" inquiries are credit report requests you will see, but are not visible to anyone else ordering your credit report. Soft inquiries don't affect your credit score. They include your credit report request, requests when your credit is reviewed for pre-approved credit offers or when monitored by your current lenders.
  
  "Hard" inquiries are credit report requests from lenders when you apply for credit (including services such as cell phone or utility accounts). They do show up on the credit report supplied to lenders and they will affect your credit score. Inquiries count for a small part of a credit score, but it is a good idea to avoid multiple inquiries in a short period of time, especially if your credit isn't very strong.
  
  Inquiries stay on your report for two years, though inquiries within the past year affect your credit the most.
• Fact #3: If you have a collection account on your credit report it remains there for seven years and six months from when you fell behind.
  Collection or charge-off accounts can be reported for 7½ years from the date you first fell behind leading up to the collection or charge-off. It does not start when the account was placed for collection or from the date of last activity. This is true whether or not you pay off the collection account.
  
  Example: You fell behind on a payment due January 1, 2000. The account was charged off for non-payment in June 2000. In December 2000, it was turned over to a collection agency. The 7½ year period starts January 2000, when you first missed that payment. The collection agency is required to report that January 1, 2000 date to the credit reporting agency so it won't be reported longer than it should be. This doesn't always happen, so be sure to check your credit report for that detail.
  
  Tip: It's illegal for collection agencies to tell you they can report information forever if you don't pay.
• Fact #4: You decide to cosign a loan for a friend or relative.  As the cosigner, you must worry about the debt affecting your credit report even if it is paid on time. 
  You may want to help out a friend, child, relative or even employee by cosigning a loan for them. Think very carefully before you do. The main reason most people need a cosigner is because they have bad credit or no credit. If they don't manage the new loan well, the cosigner will suffer.
  
  Lenders don't have to tell the cosigner in most cases that the loan they cosigned is not being paid on time. The cosigner may end up with a charge-off, repossession or collection account on their credit report — sometimes without even knowing the loan was behind. If the primary borrower doesn't pay the loan, or files for bankruptcy and includes the debt, the cosigner is responsible for the entire loan plus collection costs.
  
  Even if a cosigned account is always paid on time, the debt will count as your debt for your credit score. And, if you apply for a loan, the loan officer may factor in that debt when determining whether you have enough income to cover a new loan payment.
  
  If you do cosign a loan, make sure you monitor your credit report and step in immediately if the loan isn't paid on time.
• Fact #5:   If you have a $3,500 balance on your credit card with an interest rate of 15%. It will take you 19 years and 1 month to pay off the balance if you make only the minimum payments of 2.5%.
  
  Small minimum payments can drag out your credit card debt for what seems like forever. If your balances aren't budging, Visit our Debt Management hardship help assistance for more guidance in how to manage your debt.
• Fact #6: Should you divorce or separate from your spouse, and the joint accounts you both shared become assigned to your ex.  You are still responsible for any remaining balance on those accounts — even if those accounts are closed. 
  
  It is a good idea to close joint accounts from future charges when you separate or divorce, but that doesn't get you off the hook for any current balances. Joint accounts assigned to your ex in divorce can be reported in both names until you close and pay off, or refinance the account. Information from when the account was jointly held may still be reported for up to seven years if it is negative.
  
  What's important to understand is that even if the divorce decree assigns the debt to your spouse, that doesn't relieve your responsibility for the debt to the lender. The divorce decree is an agreement between you and your ex. It doesn't erase your original contract with the lender in which you agreed to pay back the debt. It is very important, if at all possible, for spouses to refinance joint accounts in the responsible spouse's name only. Otherwise, monitor any remaining joint accounts each month to make sure they are paid on time. If not, talk to your attorney and consider making minimum payments to protect your credit while the matter is straightened out.
  
  Fact #7: You have a fixed rate credit card. Your credit card issuer can raise the interest rate if it applies the new interest rate only to new purchases, not to existing balances.
  
  Card issuers can typically only raise the interest rate for new purchases, not outstanding balances, and require 45-days advance notice. There are a few exceptions to the rules that protect against rate increases on existing balances: you are sixty days late with a payment, you have a variable interest rate, you have an introductory rate that expires, or you are in a workout agreement and don't make your payments on time.

1. Be wary of “phishing” emails.  
   "Phishing" (pronounced fishing) is a scheme used to lure consumers into providing personal and financial information online.  Avoid opening any questionable emails requesting or including your username or password, particularly if the email urges you to provide information to restore a deactivated account, verify a financial statement, or obtain some type of reward.
   
   Typical phishing requests are not personalized.  Unlike your bank or credit card company that may include your name or an account identifier, phishing requests typically keep the salutation and information about you generic.  If you have opened an email that seems suspicious or is from an unknown source, do not open any attachments or links it may contain, and delete the email. 
2. Know who you are dealing with. 
   Become familiar with the organizations you interact with regularly by bookmarking frequently used websites, recognizing company logos, and being aware of other unique identifiers.   Be suspicious of numerical web addresses; phony websites and emails may try to fool you by looking official.  A website that uses a numerical web address or includes an "@" sign within the address could be an indicator that the website is fraudulent.  Typically, a company's Web address includes a portion of the company’s name followed by .com, .org, .edu or .net.  
3. Keep your personal information close. 
   Only provide personal information, such as your credit card or Social Security number, to organizations you know and trust.  You should never include sensitive information in an email or on any website you have not confirmed as legitimate and secure.  
4. Pay attention to security warnings. 
   Avoid websites or emails that your computer system alerts you as being potentially unsecure.  Your web browser may alert you that the website you are attempting to visit is unsafe, or  your email program may flag a message as suspicious.  Do not interact with websites or emails you cannot verify as trustworthy. 
5. Protect your passwords. 
   Memorize your passwords.  Do not write them down or share them with anyone.  Change your passwords regularly and use a combination of letters, numbers, and special characters, such as @, %, &, and #.
6. Keep your computer’s operating system up to date. 
   If your computer is more than five years old, its operating system (e.g. Windows 7 or Mac 10.6) may not offer the same level of protection as a newer system.  The manufacturer of the operating system may provide frequent software updates to help make your computer more secure.  For more information, visit:
   • Microsoft® 
   • Apple Computer® 
7. Use a current Web browser. 
   The most recent Web browsers have the latest security technology that helps to protect your online information.  Some websites are using new technology that is not compatible with older Web browsers.
8. Install a personal firewall. 
   Though most office networks include firewall protection, your home computer may benefit from this added level of security.  Check to see if your operating system already includes a firewall prior to purchasing a separate one.
9. Install, run, and keep anti-virus software updated. 
   Commercially available virus protection software helps reduce the risk of contracting computer viruses that can compromise your computer’s security.  These programs offer regular updates to safeguard your system.
10. Avoid downloading programs from unknown sources. 
    Downloads from unfamiliar sources may contain hidden programs or viruses that can compromise your computer's security.
11. Disconnect from the Internet when not in use. 
    Dedicated services such as DSL or high-speed cable provide a constant connection between your computer and the Internet.  Even if you have a firewall installed, as an additional step to help protect yourself, disconnect from the Internet when not in use to avoid unwanted access to your computer.

Here is a list of actions you can take if your personal identity is compromised:

• Monitor your financial accounts closely. 
  Most credit card companies, credit unions, and banks allow you to monitor your accounts online. You can often set up e-mail or cell phone alerts to notify you of any account activity.
• Report fraudulent charges immediately. 
  Even small charges can indicate big problems. Crooks often make small charges to test if a credit card is valid.  They may make small charges on many different credit and debit cards to avoid attracting attention.
• Place a fraud alert or credit freeze on your credit reports. 
  If you notice fraudulent activity, contact one of the three major credit bureaus to place a fraud alert or credit freeze on your credit reports; whichever one you contact is required to contact the others on your behalf. With a fraud alert, businesses will be able to review your credit report but will be alerted to verify your identity before issuing you credit. With a credit freeze, businesses will not be able to access your credit file unless you provide a PIN number. 
  • Equifax
    To report fraud, call: 800-525-6285
    Write: PO Box 740241, Atlanta, GA 30374-0241
    Hearing impaired, call: 800-255-0056 and ask the operator to call the Auto Disclosure Line at 800-685-1111 to request a copy of your report.
  • Experian (formerly TRW)
    To report fraud, call: 1-888-EXPERIAN (397-3742)
    Write: PO Box 9530, Allen, TX 75013
    TDD: 800-972-0322
  • Trans Union
    To report fraud, call: 1-800-680-7289
    Write: Fraud Victim Assistance Division, PO Box 6790, Fullerton, CA 92634
    TDD: 1-877-553-7803
  • Social Security Administration (fraud line): 1-800-269-0271
• Know your rights for credit card loss or fraudulent charges. 
  Under the Fair Credit Billing Act, your maximum liability for unauthorized use of your credit card is $50. If the loss involves your credit card number, but not the card itself, you have no liability for unauthorized use.
• File a police report.
  Without one, many companies will refuse to take your case seriously. Some companies may also require you to file the identity theft affidavit available from the Federal Trade Commission.
• Start a file. 
  Keep notes of every phone conversation, copies of correspondence and a record of your credit reports. Write down each person's name, title, and phone number in case you need to re-contact them or refer to them in future correspondence.
• Close compromised accounts and dispute fraudulent charges in writing.
  Keep in mind that closing accounts may hurt your credit scores, however, so you may want to close only those accounts that have been involved in the theft.
• Review your credit reports.
  When you place an extended fraud alert on your credit report, you're entitled to 2 free credit reports within 12 months from each of the 3 nationwide consumer credit reporting companies. You may also want to subscribe to a credit monitoring service so you'll be notified quickly of any new activity.
• File your complaint with the FTC. 
  The FTC maintains a database of identity theft cases used by law enforcement agencies for investigations. Contact the FTC Identity Theft Hotline by phone at 1-877-ID-THEFT (438-4338); TDD: 1-202-326-2502 or by mail: Identity Theft Clearinghouse, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580 or online.
• Get help.
  Check with your insurance companies and employer to learn whether your benefits include identity theft resolution services or expense reimbursement.

Check your credit report annually and possibly use a credit monitoring service to help protect your identity. Be sure to watch out for:

• Your credit report lists aliases (variations on the spelling of your name), addresses at which you have never lived, accounts you have never held, and/or inquiries from companies to which you have not applied for credit, insurance, or a job.
• You don't receive your credit card or bank account statement. A thief may have changed your address in order to use your bank accounts without raising suspicion.
• You receive bills for accounts you didn't open, such as a cell phone or credit card.
• You receive medical bills or health insurance benefit statements for medical procedures you've never had.
• A debt collector calls about a bill that doesn't belong to you.
• Your annual Social Security statement lists income you didn't earn.
• Someone calls to "confirm" information about one of your accounts or warn you about fraud, and asks for personal information or account details, such as your Personal Identification Number (PIN) or the three-digit security code on the back of your credit card.

You have rights, and it is important to understand how debt collection laws can protect you against unfair collection tactics. The Fair Debt Collection Practices Act (FDCPA), a federal debt collection law, in addition to state statutes provides the following consumer protection:   

1. Harassment by debt collectors is against the law. 
   Collectors cannot threaten violence; use profanity, or racial or ethnic slurs when they talk with you; call you repeatedly to annoy you; or threaten to take legal action they can't legally take. Whenever you speak with a debt collector, take notes of your discussion, and keep them in a file with copies of any letters you receive from them.
2. You can stop debt collectors from contacting you at work. 
   If you tell a debt collector that your employer does not allow you to take collection calls at work, they must stop contacting you there immediately.  
3. Your debt is a private matter. 
   Other than a cosigner, your spouse, or your attorney--debt collectors cannot discuss your debt with third parties. That means they cannot tell your neighbors or coworkers about your debt. They can attempt to locate you by contacting others (without disclosing they are collecting a debt); however, once they've found you they must stop contacting the other individuals.
4. States have their own protection laws. 
   In addition to the federal law, states have their own laws related to debts and debt collection. State debt collection laws put a time limit on collecting debts. Each state has a "statute of limitations" that essentially determines how long a debt collector can sue to collect. This time period is usually between 4 and 6 years from the time you stop paying on the debt. 

What is a Credit Report?

If you have ever opened a credit card account, financed a car or borrowed money from a bank, it’s tracked in a credit report, a detailed file about your personal credit history. Credit reports record your loans, credit cards, payments, outstanding debts, and other financial obligations.

The information in your credit report is supplied by companies that have given you credit or loaned you money. These creditors (such as banks, credit card companies, and department stores) provide regular updates about your credit accounts and loans to credit reporting bureaus. Credit reporting bureaus keep the information in a database and then provide it to lenders when you apply for a new credit card or loan.

Whenever you apply for a loan or credit, lenders use your credit report to decide whether they can trust you to pay back the money you have borrowed.

Your credit report contains key information  about you and your finances, which include:

• Current and previous addresses and employers, social security number, and date of birth
• Public record information including liens, judgments, and bankruptcy filings
• Outstanding debts that have been sent to a collection agency
• A list of your credit accounts and loans including:
  • Current and past payment information (including late payments)
  • Current balances on your credit cards
  • Current amounts of outstanding loans
• Overdue child support payments
• Credit requests made by you or a company

What do Lenders Look For?

There are several factors in your credit report that lenders may consider when deciding whether to give you a loan or credit account. Lenders review your credit reports to decide whether or not to lend you money based, in part, on the history they see on your credit report. And, they use your credit score to determine how much of a risk you are — typically, a higher credit score indicates less credit risk for the lender. Lenders look at your:

• Payment track record
• Current debts
• Credit history
• New accounts
• Types of credit

How Does the FICO Credit Score Affect You?

FICO scores range on a scale from 300 to 850 — the higher the better. Generally speaking, a credit score that falls below 600 is considered fair to poor and a score of 720 or higher is considered very good to excellent.

Your credit score can affect how much money a lender will lend you, and at what interest rate. Even a 50-point difference in your credit score can help you get a better interest rate on a loan, which can save you thousands of dollars over the life of the loan.

According to Fair Issac Corporation’s website, your credit score is calculated using information about:

• Your history of on-time payments (35%)
• The amount of money you owe (30%)
• The length of your credit history (10%)
• The number of recently opened accounts and inquiries to your credit report (10%)
• The types of credit you use (10%)

Request Your Credit Report and Score

U.S. law requires the three major credit bureaus (Equifax, Experian, and TransUnion) to provide a free credit report once a year, at your request.  

You can access your credit report from the three credit bureaus by requesting the report online at www.AnnualCreditReport.com, by calling 877-322-8228, or by mailing an Annual Credit Report Request form to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

You are not obligated to purchase or sign up for anything to get your free report. The free credit reports do NOT include your credit score.  You will be offered the chance to purchase your credit score as you order each credit report. 

 You should review the report thoroughly to make sure the information is accurate, and watch out for: 

• Incorrect account balances. If you discharged (wiped out) a debt in bankruptcy, for example, that account should list a zero balance.
• Wrong dates for negative credit items. Make sure the dates for negative credit items (such as bankruptcy, foreclosure, accounts charged off as a bad debt) are correct.  Otherwise, that negative information may be reported longer than allowed by law.
• Unpaid tax liens. If your credit report lists a tax lien that has not been paid, make sure you resolve it with the IRS, since unresolved tax liens can be reported indefinitely. If you can't pay the full balance, talk with a tax professional about settling the debt for less through an Offer in Compromise.
• Duplicate collection accounts. If an account has been sent to collections, only two entries should appear. The first one will be the original account with the creditor, and will usually be listed as a "charge off," meaning the debt was not paid and written off as a bad debt. There may be a second listing from the collection agency that is trying to collect. If the debt was assigned to multiple collection agencies, however, only the most recent collection account should be listed. 
• Unpaid collection accounts. If your report lists collection accounts that you haven't paid, do your homework before you decide how to proceed. Collection accounts can only be reported for seven and half years from the date you first fell behind with the original creditor. That's true whether you pay them or not. If you don't have the money to pay all your accounts in full, collection agencies may be willing to accept a smaller lump sum payment to resolve the debt.  

Credit scores range from 300 to 850 and a score over 700 is generally considered to be "good" by most creditors. Unfortunately, reaching that number is not quite as simple as paying bills on time and as agreed. While payment history accounts for 30% of your FICO score, there are several other factors that contribute. Here are some common credit mistakes to avoid:

• Not checking your credit report regularly. 
  Request a free copy of your credit report each year from AnnualCreditReport.com. Familiarize yourself with your credit history and review it for accuracy. Knowing where you stand will help give you the tools needed to increase your score. 
• Having too many credit inquiries. 
  Generally, six or more inquiries within a six-month period of time will scare a lender. Applying for loans on the Internet and transferring balances on credit cards can also have negative consequences. However, most credit scores are not affected by multiple inquiries from auto and mortgage lenders within a short period of time. 
• Borrowing more money than you can easily afford to repay. 
  Your credit score is based in large part on how much money you have borrowed. A good rule of thumb is to borrow no more than 30 percent of your income (this includes mortgages, auto loans, credit cards, etc.)
• Staying out of debt.
  Having no credit history is nearly as bad as having poor credit history. From a creditor's perspective, if you have stayed out of debt your whole life, they have no way to judge how you would handle a loan. Maintaining several types of accounts shows that you are financially responsible. According to myFICO, your credit mix (credit cards, store charge cards, loans, etc.) accounts for 10% of your score. Keep in mind you do not have to carry balances on your credit cards to build good credit. It's perfectly fine to use them and pay the balance in full each month.
• Making late payments. 
  There are several negative consequences of making late payments and the "Universal Default" clause is one of them. Under this clause, a creditor may raise your interest rate if you are late on credit obligations.
• Closing old accounts. 
  It may seem wise to close old, unused accounts, but doing so could shorten the length of your credit history and harm your score. Credit history makes up a whopping 15% of your score. If you choose to keep old accounts open, be sure to keep tabs on them regularly to be certain they are not being used fraudulently.