These Activities will Harm your Credit Score

No one sets out to intentionally ruin their credit or to lower their credit score. Yet there are many activities you can take part in that will do just that. Being aware of them will help you avoid them. You certainly don’t want to realize down the road that your decisions led to your self destruction as far as your credit is concerned.

Some people don’t seem to care that their credit score is low. The fact that they are still getting approved for the credit they apply for is what is important to them. If you fit this profile though you need to stop and look at the big picture. You may be paying hundreds of dollars more each month than you need to. This is due to your low credit score resulting in higher interest rates.

The biggest portion of your credit score is due to your payment history. You need to do all you can to make each of your payments on time. Have some money in savings to cover your basic living expenses for a couple of months. That way if you do run into a hardship you won’t be struggling to pay them. Being late with one payment by 30 days can result in your credit score dropping by as much as 100 points.

If you find you can’t pay your bills on time talk to the creditors. You need to see what options are available. You will be surprised at what can be done when you communicate with the lender. Too many people just don’t say anything and so it appears they don’t care. You don’t want the debt to end up at collections as it will cost you more. It will also reflect very poorly on your credit score.

Be careful how much you charge on those credit cards as well. It can become very comfortable paying a low monthly payment. Yet you won’t get your balances to really budge at all. You need to try to keep the balances on each credit card below 35% of your total credit. If you have balances that equal more than that it is hurting your credit score. You need to make a serious commitment to reducing that total debt so it can go back up.

Don’t be in a rush to close out old credit card accounts though. You may be using the newer ones with great rewards programs. A portion of your credit score though depends on the length that accounts have been open. So one that has been in place for ten years is very important to your points. You can choose not to use it but don’t close the account or your credit score will suffer.