We all make mistakes, but those mistakes that damage a credit score can hang around for  years and cost a borrower big-time. All it takes is a small drop in a credit rating before lenders charge higher interest rates, lower credit limits and deny future applications for credit.

Consider that a solid credit score of 700 could get a homebuyer a 5.99-percent interest rate when applying for a mortgage. Let that score drop one point to 699, however, and the buyer may get stuck with a rate a full ¼% higher, adding substantially to the payment and the interest paid over the life of the loan. Avoid the following seven mistakes to have a credit rating loan officers will find irresistible.

1. Missing payments  – It’s just common sense that missing payments is going to damage your credit rating. Three factors, however, figure into the impact on your credit report: The frequency with which you made late payments; how recently you made a late payment; and the severity of your late payments. Even if you’ve gotten far behind in payments, it’s in your best interest to bring them up to date as quickly as possible, or at least make regular, good-faith payments towards the total owed.

2. Closing credit card accounts  – The reason you close out an account is irrelevant to lenders. Closing out one account can damage a  credit rating because the positive history of many years of regular payments will be lost. An open account counts towards a good score, particularly if you keep the account active by using the card every few months and paying the balance off the following month.

3. Maxing out cards  – A spending spree can damage your credit score because the ratio of debt to available credit accounts for one-third of your score. Optimally, you want to maintain a balance of around 10 percent of your available credit and never owe more than 30 percent. An even better option is to pay your balance down before the statement cycle ends.

4. Holding too many cards  – It can be tempting when a cashier offers 20 percent off a purchase if you apply for a store credit card, but that’s a bad idea. Holding too many store cards is even more detrimental to your credit score than having too many bank cards. Opening just one card can temporarily drop your score by several points. The effect is exponential with each card you add. Lenders like to see a mix of credit, such as cards, mortgage, car loans, etc.

5. Settling with lenders  – Settling means the lender has accepted less than the amount you owe on an account. This may seem like a good idea but the lender still reports the remaining amount to credit bureaus as a deficiency balance, which is considered a negative. If you must settle with a lender, try and arrange a deal so they won’t report the deficiency balance.

6. Not understanding your rights  – The Fair Credit Reporting Act governs lenders and credit-reporting agencies. Learn your rights under the FCRA and make sure lenders follow them. Most importantly, you have the right to a free copy of all three credit reports (Equifax, Experian and TransUnion) either annually or each time a negative item is placed on your report. Make sure you request copies from AnnualCreditReport.com and not a Web site that tries to lure you in with a cute musician. AnnualCreditReport.com is the only non-profit agency providing reports and they will not try to sell you other products.

7. Misunderstanding introductory rates  – Introductory rates are designed to draw you into charging up a card before the loaning agency increases the interest, leaving you paying more in interest than you are in actual debt. It’s not unusual for a card’s interest rate to go from 0 percent to 18 or 20 percent after the introductory period expires.