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What kills my credit score?

Your credit score is an essential factor when trying to get loans from creditors or lenders. Remember that there are numerous ways you may be hurting your credit score without realizing it.

What Kills My Credit Score? 

Your credit score is a key component in getting approved for a loan from your creditors or lenders. However, you can hurt your credit score without realizing it. There are numerous ways you may be hurting your credit score. Here are just some of the tips that might show you how you might be hurting your credit score: 

Not checking your credit report – One of the most common mistakes people make is not checking their credit report often. By checking your credit report, you track your situation and check your risks such as fraud. You can be quicker to fix the errors in your credit history, rather than be too late when you apply for a loan or when you want to buy a house or a car. 

Late payments – Late payments can damage your credit score, losing the reliability of your landlord, bank, or even your employer. A U.S. News & World report estimated that a single late payment can lower a credit score by 100 points or more. Paying your bills is a priority. Even when you cannot pay the full amount, pay at least the minimum as a show of faith that you are at least trying.

Too many credit cards – Too many credit cards negatively impacts your credit score and impacts your ability to borrow money. It puts lenders at suspicion or doubt, making them feel unsure as to what will happen if you max out all your credit cards, meaning you've reached your credit limit and no credit left to utilize. It’s better to keep your utilization ratio low and your credit history long, and try not to increase your credit card balances. 

You do not have a credit card – Ironically, this too, is a problem. Without a credit card, you do not have much information at your disposal to show, meaning you do not have a credit history and therefore you do not obtain creditworthiness. When the time comes to apply for a loan, by not having a credit card, you cannot get one, because you have stopped using credit. It is important to continue using credit to maintain activity on your credit report if you ever plan on getting a loan at some point in the future. 

Asking for a higher limit – Asking for a higher limit can potentially hurt your credit score. It is best that you stick well within your current credit limit, avoid risks, and thoroughly think it over if you want to ask for a higher limit, especially when thinking of applying for a loan. 

Consolidating debt into one card – By transferring all your credit card balances into one card will lower your credit score and can also increase your debt-to-credit ratio. 

Co-signing on debt – By co-signing on debt for a spouse, family member, or friend, you are damaging your credit score. The debt obligation can show immediately on your credit report, and the higher the debt loan is the more your credit score is impacted. If the other party doesn’t make necessary payments on time, their missed payments will show on your credit report too. 

Not fixing credit report errors – If you see an error on your credit report, fix it immediately. Contact the credit bureau issuing that report and ask them to investigate it, and send a letter to your creditor or lender, dispute and explain to them the incorrect information.

Negative Records – Paying off your debts does not mean that it is deleted from your credit report. Instead, the debt is listed as ‘paid.’ Negative records stay on your credit history for up to seven years. 

Paying your rent late – Paying your rent late can lead to a frustrated landlord who can call your credit bureau and report that you are late on payments. You can avoid this if your landlord allows you to pay your rent half during the first day of the month, and the rest on the 15th day. 

Medical debt – Medical debt can affect your credit score, since it can remain on your report for up to seven years from the original date the medical debt went into default. On the plus side, medical collections that have zero balances are not considered by FICO and VantageScore’s newest models. 

Not paying your taxes – The government can place a tax lien on your property, affecting your credit score. You need to file your taxes on time each year in order to avoid this, or file for an extension. 

Bank foreclosures your home – If the bank foreclosures your home, your credit score drops--but it also depends on other factors and your credit history prior to your foreclosure. You can get help on this issue through your state’s housing agency and contact the Federal Trade Commission.

Filing for bankruptcy – Filing for bankruptcy will mean that your credit score will drop significantly--100 points or more, and it can stay on your credit report for up to ten years. You can avoid this by calling your creditors and negotiating a plan with smaller payments. After your bankruptcy, you need to start reestablishing your credit history, because your credit stays low if you do nothing after a bankruptcy. You need to rebuild healthy credit by obtaining a secure credit card with a credit limit.