Secured cards generally have a lower credit limit than traditional credit cards, which prevents users from taking on more debt and doing
more damage to their credit scores.
Furthermore, you probably haven't had enough time to do
much damage to your credit score, which means you can use credit cards — responsibly — to help fund your entrepreneurial dreams.
It would be unfair if your cosigner faced financial challenges and
damage to their credit score from having to repay your student loans if you become disabled or die.
Although there is no ideal number of accounts to have open, you'll certainly want more than one for the reasons noted above, but not so many that you're causing constant
damage to your credit score because of regular hard inquiries by lenders.
Second, not paying your debt will do
real damage to your credit score; defaulting on your loan will stay on your credit report for seven years, making it nearly impossible to get other loans.
Fair Credit Billing Act (FCBA - 1974) requires that a credit card company credits your payments and corrects errors right away on your bill
without damage to your credit score.
Mistakes in any of those areas can bring down your credit score, but the worst offenses and most
damage to your credit score comes from failing to pay on time and taking on more debt than you can afford.
Additionally, be careful accruing a balance that is too close to your credit limit, as this can be
damaging to your credit score thanks to an increased utilization rate (the ratio of how much credit you are using over how much you have available).
According to a New York Federal Reserve Bank study, people who file for bankruptcy get through the ordeal in better financial shape and with
less damage to their credit score than those in similar financial stress who don't file for bankruptcy.