Whether you’re trying to buy a house or just improve your credit score, there are some things that you might be doing, even unknowingly that can tragically affect your credit score. Here are 10 things you may be doing that’s killing your credit score.
#1. Paying your bills late.
Your payment history is really the biggest thing that lenders go on. If they see that you have not paid your bills on time, there’s pretty much no guarantee you’re going to pay them on time either.
#2. Have too many credit cards.
Now, this could go either way. If you have 10 credit cards and all of them are maxed out it looks much different than 10 credit cards with nothing on them. But, the more credit card you have, the more of a risk you might be to a lender.
#3. You don’t have any credit.
If you have no credit cards or loans then you really don’t have a credit history that lenders can check up on. Having a little bit of credit and maintaining that credit in a healthy way is really the best way to increase your credit score.
#4. You close inactive or old cards.
I know that I just said having too many credit cards is a bad thing, but closing cards that have a zero balance means that your debt to income ratio will go up. The more loans or credit card you have with a zero balance, the better it looks.
Related: Can I still buy a home with poor credit?
#5. You consolidate all your debt into one card.
If you cancel all the rest of your credit cards and consolidate all into one, it looks as if you have a very high debt to income ratio. It’s better to have a couple of credit cards with just one or two balances rather than one large sum.
#6. You cosign on debt.
Cosigning for friends or family can be a quick way to ruin strong credit cards, especially if those people destroy that loan. It can impact you in two ways, first that the obligation can immediately show up on your credit report and the higher debt load can impact your credit score.
#7. You are not fixing mistakes.
Get a copy of your credit report and check to make sure there are no mistakes. If anything is wrong it should be corrected immediately. You’ll want to contact the credit bureau that issued the report and investigate the mistake. If for some reason it cannot be corrected, start by sending a letter to the lender and each of the three credit reporting agencies stating the date of the error and how it is corrected.
#8. There are too many credit inquiries.
The more your credit is checked, the lower the number could be. Applying for credit too often can negatively affect your credit score.
#9. You’re late on other payments.
Parking tickets, medical bills, and even library fees can add up to suggest a negative credit score. Make sure you are on the up and up on all of your bills including payments, late fees, and tickets.
#10. Renting a car with a debit card.
Renting a car with your debit card instead of a credit card assumes the risk of damage in case of an accident and it can subject you to paying for deposit and also renters insurance. When you use a credit card, it can offer you collision protection and towing charges.
These are just some of the ways you can negatively affect your credit score, for the best interest rates and loan terms, it’s important to increase that credit score as high as possible. For more tips and suggestions on your specific credit history, give us a call today or contact us at any time.
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