14 Things That Hurt Your Credit Score

Everyone wants to have a good credit score. A good score can be the deciding factor in getting a mortgage, getting a loan, and sometimes even for getting a job. With the current state of our economy it is more important than ever to manage your credit score.

There are a lot of things that you can do to increase your score. But you need to be careful, as other things that you do can hurt your score. Some things that negatively affect your score are obvious, like not paying your bills, but other things are more subtle.

So without any more ado, here are some things that will hurt your score.

Not Keeping Up Your Side of the Deal

1. Paying late
2. Not paying
3. Being sent to collections
4. Court judgment

It is said that thirty-five percent of your credit score is your payment history. Consistently being late on your credit card payments will hurt your credit score. And if not paying is bad, ignoring your credit card bills is much worse. If you are really bad and don’t pay your bills, your account will be sent to collections. This not only shows that you don’t pay your bills, but that the creditor gave up trying to collect and has hired a third party to try to get the money you owe them. If that is not bad enough, having a judgment against you shows that not only do you avoid paying your bills, but that the court had to get involved to make you pay the debt.

Obviously, all of these hurt your credit score. Pay your bills on time and avoid the hit to your credit.

Really Not Keeping Up Your Side of the Deal

5. Having your account written off
6. Loan Default
7. Filling Bankruptcy
8. Home foreclosure

Having your account written off is bad. This happens when creditors think you are not going to pay your bill at all. Filling for bankruptcy is almost as bad, by filling you are telling all your creditors and potential creditors that you can’t pay what you owe. Understandably this lowers your credit score. Loan defaults and home foreclosure shows the same, that you couldn’t pay your bills. So why should you be trusted with more debt?

Over Use of Credit

9. Applying for too many accounts
10. Almost Full Credit Cards
11. Credit Cards to the Max

Something else that will hurt your credit score is using too much credit. Seems odd, but if you are given a $5,000 credit limit, you will get penalized if you use all of it. From the lenders perspective using all that credit that you have available is irresponsible. They look at high balances as proof that you are strapped for cash and could be having a hard time making payments. The higher your outstanding debt, the lower your score will be.

Overlooked Things that Hurt You

Here are a couple of things that can hurt your score that are not quite as obvious.

12. Library fines: The fines themselves won’t hurt you, but if you leave them unpaid the library could send you into collections for the money. A simple $1-2 fine could potentially make it impossible for you to qualify for that mortgage .

13. Shopping for a loan: When you apply for a loan or a bank account your credit report gets pulled. Too many inquiries into your credit history will also lower your score. This is because it looks like you are trying to open a lot of new lines of credit. To help avoid this, try to do all of your comparative shopping within two weeks, all those credit pulls will look like just one that way.

14. Closing old account: Part of what your credit score is based on is length of credit history. You may think you are acting responsibly by closing old accounts, but from your credit scores point of view, you are shortening your credit history. Also the amount of debt you have in relation to the amount you have available is a big deal. By closing an old account you are removing its potential available credit from the calculation. The result is your outstanding debt becomes a bigger portion of what you have available.

Conclusion and Further reading

Keep these things in mind whenever you make decisions on your finances. It really could make the difference having a poor score and a score that will open doors to a new home.

For those that our interested, below are a couple links to other articles with even more information on what not to do in them.

• 5 Things that Can Hurt your Credit Score
• Weird Stuff That Hurts Your Credit
• 11 Things People Do That Hurt Their Credit
• 15 Things That Hurt Your Credit Score
• How to Hurt Your Credit Score