Credit scores have a large impact on our financial success. Having a strong score means you have the opportunity to take advantage of the best available interest rates on mortgages, auto loans, refinancing student loans, even cheaper auto insurance. To get good interest rates, you typically need to have a score above 700, but the best deals will go to consumers with scores above 750.

Credit scores reward responsible behavior, if you live within your means and pay your bills on time you should have a good score. However, being responsible does not always mean that you will have a strong credit score.

Here are three common mistakes that responsible people make, costing them points on their credit score, and money in the long run.

1. Having only one credit card, and using it for everything.

Your credit utilization is the percentage of available credit that is being used. If you have a credit limit of $1,000 and a balance of $200, your utilization would be 20%. This is calculated for each individual credit card and across all credit card accounts. High utilization can have a significant negative impact on your score. Keep utilization below 20%, but if you want the biggest positive effect on your score, keep it between 1-3%.

Utilization is important to lenders for two reasons. First, high utilization shows them you can’t control your spending. If you consistently max out your credit cards, you appear to be very risky to lend to. Second, credit limits are calculated based on your income, so when you use too much of the credit available to you, banks will think you have too much debt relative to your income, whether you pay them off in full or not.

You can lower your utilization in two ways. First, you can make your credit card payments more frequently. Your goal is to keep your balances low, but still more than zero. Paying down your balance in the middle of the month will reduce your statement balance and your utilization. Second, you can ask your bank for a credit limit increase, which will increase your available credit, making your statement balance have a lower effect on your utilization.

2. Not knowing what is on your credit report.

Strange things often appear on credit reports. Check your credit reports once a year to make sure that all accounts are accurate and up to date. If you see any incorrect information on your credit report, you need to take action. CreditServices.com is an industry-leading credit repair company, our Attorney-Reviewed service levels can help you get negative remarks removed from your credit report.

3. Paying collection items first.

Every once in awhile, you may run into unforeseen problems and miss payments. Responsible consumers work hard to pay back all of the money they have borrowed. However, when it comes to your credit score, keeping active accounts current is more important than paying on a collection item.

Once a collection item appears on your credit report, the damage has been done. So skipping credit card payments to pay the collection will negatively impact your credit score even more.

Collections should be dealt with only after your obligation to active creditors has been fulfilled in order to maintain your credit score and avoid further damage. Also consider working with our Debt Settlement department to settle your collections and save yourself money.

Credit scores are complex.

Making the most of your credit score, and protecting your financial future is not easy. A lot of information goes into calculating your credit score, which can get overwhelming at times. Since credit is such an important factor in so many purchasing situations, you need to have a firm grasp on where your credit profile stands. CreditServices.com can help repair negative items on your credit report, while also teaching you how to better manage the accounts you have, and inform you as to if you should open or close any other accounts based on your current profile. Our Credit Advisors are experts on the FICO formula and can help you develop a better understanding of how to manage your accounts now and in the future.