5. You Don’t Have Any Credit Cards
Lenders like to see a long history of responsible credit use, and if you don’t have a card, you might not have much information to show. Although it seems counterintuitive, not having any credit cards can actually hurt your credit score as much as having too many.
You might be cheering if you’ve paid off your mortgage or other loans and buy things only with cash now. But if you apply for a home loan, you might find that you can’t get a loan because you’ve stopped using credit, Kelly said. If you think you’ll be applying for credit at any point in the future, you need to continue using credit to show recent activity on your credit report.
How to avoid it: If you don’t want to open your own credit card account, consider asking a friend or family member to add you as an authorized user. You won’t have to use the card for it to benefit your credit score — you’ll simply piggyback off the good credit habits of someone else. Having a credit card can benefit your credit, Kelly said, because your score is based, in part, on how many types of credit you have and how well you manage those accounts.
How to fix it: Becoming an authorized user on someone else’s card can also help you repair credit mistakes. Just make sure the person who adds you to a credit account is a responsible borrower. After all, their bad borrowing behavior can also show up on your credit report.
