You can do a lot of things right and still unintentionally hurt your credit score by making one of a series of common mistakes.  Many people think that if they just make their credit card’s minimum payment every month, their score will be excellent.  However, there are a host of other things that can have a negative impact on your score and your ability to get better rates on credit cards and loans.

Here are some things to watch out for.  These are common mistakes that can negatively affect your credit score.

1. Closing credit card accounts.  It can seem unreasonable, but closing a credit card account that has been in good standing is not a good idea in terms of raising your credit score.  For one thing, you might want to keep a credit card that has a positive history for as long as possible.  You can even juke the numbers a little bit by making one or two small purchases with the old card each month and then paying off the balance immediately.  The credit card issuer will still give positive reports to the three credit score bureaus, so you can actually gain points with this strategy.

2. Transferring balances can have a negative effect on your credit score.  While it might not be a deal-breaker, it can hurt your credit score, especially if you transfer a balance that takes you close to your credit limit on the new card.  The closer you get to your credit limit, the more points you lose.  If you are going to transfer a balance, the best option is to transfer an amount that is far below the credit limit of the new card.  It might even pay to move your balance to more than one card if you come across good balance transfer offers.

3. Keep your balance to limit ratio low.  This is another related issue that can hurt your credit score.  A portion of your score is related to the amount of money that you owe (balance) versus the amount of credit that you have (limit).  This is another reason that it is advantageous to keep old accounts open if they are paid down.  You can even lower your debt to limit ratio if you  open up new credit card account and keep a very low balance.

4. Settling debts for less than you owe.  It might seem like a good thing to settle your debts. Even better if you can settle them for less than the amount that you owe.  However, doing so usually means that you have been in negotiations with a creditor because you were unable to pay off your debts and credit card balances in a timely manner.  This is a red flag for credit score bureaus and will always hurt your score significantly.

5. Make on-time payments.  All these lesser known credit score killers aside, the single best thing that you can do for your credit score is to pay off your bills on time each month.  Timely payments still account for 35% of your overall credit score.  That is 35% that you can get for free by simply making sure that you bills are paid on time.  Defaulting on loans or credit card payments or having your account sent to a collection agency is one of the biggest black marks you can have on your record.  Luckily, it is easy to avoid these problems if you make your payments each month.

6. Seek help.  If you are unable to make payments and manage your accounts, it is better to seek help from a credit counselor or debt reduction agency than to simply wait for your debts to pile up and then file bankruptcy.  It is never too late to seek help, but the earlier you do so, the quicker you can rebuild your credit score.  If you file bankruptcy, it will take years to rebuild your credit.