To improve your credit rating or increase your credit score, you likely already know that it’s important to do the basics: such as paying your bills on time each month, and keeping your accounts out of collections.

But are you aware that a host of other financial decisions you might make – especially seemingly innocent choices – can also hurt your credit rating?

Don’t get caught making the following 10 financial mistakes, each of which can damage your credit in unexpected, yet serious ways. 

Don’t close old credit card accounts

So, you finally paid off that credit card bill that’s been nagging you for ages.

Your first inclination may be to say “Good riddance!”, cut up the card and close the account.

Not so fast. Closing the account can actually lower your credit score.

First, you’ll have a smaller amount of available credit and you’ll be making your credit history with that card go away a lot sooner.

Available credit and account history factor in your credit rating.

Even if you pay off a credit card, you’re usually better off keeping that card open.

 

Don’t max out your cards before a bankruptcy

 

Most of us cringe at the idea of not making good on our financial responsibilities.

But if you’re contemplating bankruptcy, you may have been counseled to put certain charges or expenses on a credit card in the anticipation that you’re going to soon wipe the debt out in bankruptcy court.

But tread very, very carefully here.

When creditors see that you’ve maxed out your cards or made big charges just prior to declaring bankruptcy, they may try to challenge your bankruptcy filing in court.

And a bankruptcy judge may just reject your petition, leaving you on the hook for that credit card debt.

 

Don’t apply for gas cards and department store cards

 

We all know that gas prices can eat into our budgets.

But even if your wallet is taking a serious hit every time you fill up your tank, it’s still wise to avoid applying for gas cards and buying fuel on credit.

Ditto for applying for department store credit cards.

Gas cards and retail store cards usually have very high interest rates — far higher than national brand cards such as Visa or MasterCard.

Plus, if you frequently apply for multiple credit cards, you’ll generate inquiries on your credit report, lowering your credit score.

To avoid these problems, only apply for credit when you truly need it.

 

Don’t cosign for someone else’s loans

 

It can be really hard to say “no” to an adult child or another loved one who is seeking a cosigner for a car loan, business loan or some other form of credit.

But the truth is that cosigning for these folks is often a disaster in the making.

You risk damaging your credit rating, being liable for that person’s debt, and even worse: The relationship could be marred if the deal goes sour.

 

Don’t share your credit card number

 

If someone calls, mails or emails you unsolicited and requests sensitive personal information such as your credit card number or your Social Security number, never divulge it, no matter how nice or legitimate the person sounds.

Such requests are often financial scams targeting seniors.

Criminals are trying to steal your money or make unauthorized use of your credit and good name.

If you ever become the victim of identity theft, report it immediately to your local police department and to the Federal Trade Commission.

You can reach the FTC toll-free at 877-ID-THEFT (877-438-4338) or at its website.

Read the full article, 10 Common Credit Mistakes on AARP.com