8 Surprising Things That Hurt Your Credit Score

Almost 20 percent of Americans have bad credit scores less than 700. If you find yourself in this category you may be wondering what are the things that hurt your credit score.

To understand how to improve your bad credit, you first need to know what a credit score is. This handy guide will explain all that you need to know to get your credit score out of the dumps and back into the stratosphere.

What is a Credit Score?

A credit score is just a number. Unfortunately, it also affects your ability to borrow money or the type of interest rates you get on your loans. A credit score is a numerical ranking between 300 to 850 with 850 being the best.

It ranks your total creditworthiness and level of risk for a financial institution to lend you money. Your credit score is determined by analyzing your credit history and an amalgamation of different factors.

Things That Hurt Your Credit Score

If you have bad credit never fear. Some loans have certain approval processes that allow you to remain eligible. Otherwise, the following 8 factors have heavy influences on your credit score.

1. Late Payments

Even one late payment can decimate your credit score. Any payment that is late in excess of 30 days will often be sent to credit reporting agencies. These agencies will then drop your score as a result.

2. Hard Credit Inquiries

Applying for more credit means that a lending office will run a hard credit check on you. Each one of these inquiries will influence your score and not often in a good way. This is especially true if you are denied a loan.

3. Canceling Credit Cards

When you close a line of credit it will negatively influence your credit scores. The more open lines of credit you have the better. Having them for a long period of time is good as well.

4. Forgetting a Bill

Bills can be easy to forget. Unfortunately, a non-payment has a huge negative influence on your credit history and as a result your credit score. Don’t forget to pay for the utilities!

5. Co-Signing

If you co-sign on a loan for someone with bad credit, you inadvertently take on their responsibility. If they can’t or forget to pay an outstanding balance it reflects poorly on your credit.

6. Having Only One Credit Card

Not having diversity in your line of credit is a red flag for lenders. If you only have one credit card, this may be holding your credit score back from its full potential.

7. Maintaining a High Balance

The ideal balance to have is about 30 percent of your maximum credit allowance. If you are consistently keeping your account above this, you may be hurting your credit score in the process.

8. Ignoring Credit Reports

Ignorance is not bliss when it comes to the world of credit ratings. Getting a credit report is easy but ignoring one will torch your credit rating. Keep informed about your credit.

Build Your Credit Today

Like it or not we live in a credit-based society. Learning about the things that hurt your credit score is important to maintaining your finances and a living happy life. If your credit is bad, try fixing some of the things in this article to boost it.

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