Many of us understand the basics of credit scoring and what it takes to keep a credit report in good order: pay your bills on time, don’t max out your credit cards, and definitely try to avoid a bankruptcy or foreclosure.

But credit scoring is a much more complex system than just those basics, with a far-reaching impact in consumers’ lives. In fact, just one slip-up could cause your score to sink, costing you countless dollars when it comes time to apply for your next home loan, or even determining where you can rent or live.

Luckily, we have some unusually valuable insights from a recent interview with a high-up insider at TransUnion, one of the nation’s three big credit reporting bureaus.

In a recent interview with Barron’s Live, Margaret Poe, Head of Consumer Education at TransUnion, offered some gems when she revealed the three biggest mistakes consumers make.

When asked, “What’s the most common mistake people make with their credit scores?” Margaret responded that it was not checking their credit report, or not checking it regularly or early enough before applying for a loan.

“You really don’t want to be at the dealership, and realizing your credit isn’t where you thought it was,” said Poe – the #1 mistake consumers make with credit!

According to this high-level Head of Consumer Education at TransUnion, people should be checking their credit reports at least once per month.

“That’s pretty good like you have a good sense of what’s going on,” said Poe in the Barron’s Live webinar. “Typically, credit-card bills and things like this are reported to the bureaus on a monthly basis, and it may be at a different point in the month but typically that’s the reporting cadence. So, if you’re also checking once a month, that’s probably great.”

While consumers don’t need to be overly focused on achieving a perfect 850 score, according to Poe, they definitely should “get your credit score up and enter an excellent range,” she offered.

After revealing that #1 credit mistake consumers make, Poe offered a few other common mistakes that damage credit.

She added that consumers should think twice before closing a credit card or account that’s old and in good standing. When you close an old account that has a perfect payment history, whether you’re using it or not, it can certainly damage your credit.

“In some ways, it feels counterintuitive,” Poe said, before offering a personal example.

“I remember when I was younger, I looked at my credit history, I was like, ‘Oh, I don’t use that card anymore. It’s all paid off. I want to clean up my credit report,’” she added. “I just wanted it to look cleaner, I want there to be fewer things. So, I closed the account. Well, that had a slight negative impact for me,” Poe explained.

Her credit eventually recovered, but it’s an unnecessary snafu that millions of consumers keep making every year.

Keeping those older accounts, even if not used, is, “OK because it’s showing that positive history, and it extends your total length of credit,” according to Poe.

Poe went on to reveal a third common credit mistake that consumers make, which is not building a credit history early enough.

She also noted that people often fail to check their credit report or score well before applying for a credit card, mortgage, or auto loan. That often means they get a nasty surprise when they think they’re ready to buy or apply, and facing higher rates, more expensive payments, or outright loan applications rejected.

That’s very sound and smart advice from the Head of Consumer Education at TransUnion!

There’s a lot of credit education out there, but it’s important you understand the full picture and gather information from reputable sources, and Margaret Poe is one of the best.

Another great source for credit information, analysis, and help is Blue Water Credit, so please contact us with your questions or when you’re ready for a credit score boost!