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7 Things Youre Doing (Without Realizing) to Hurt Your Credit Score

It’s easy to be in casual denial about the reality of your financial life until it comes to bite you. I definitely had my years of happy denial!

Consumer credit scores have a big impact in our financial lives and it is important that we take care to do the right things when it comes to improving credit and maintaining a high score.

It is also important to recognize what actions or inactions will hurt our credit score. Some consumers make mistakes that cause their credit score to drop significantly. Even if you don’t need a loan in the foreseeable future having good credit matters for other purposes including lower insurance premiums, your ability to rent an apartment, and in some cases, your ability to get a job.

Trust me, good credit is super important to most life decisions you’ll need to make even if that doesn’t seem like the case at the moment. Don’t wait until you need a good credit score to make fix your financial mistakes because by then it’ll likely be too late.

  • 7 Things Youre Doing to Hurt Your Credit Score 1 of 8
    7 Things You’re Doing to Hurt Your Credit Score

    Click through for 7 things you may be doing wrong that are hurting your credit score:

    Image source: StockMonkeys.com

     

  • Too Much New Credit 2 of 8
    7 Things You’re Doing to Hurt Your Credit Score

    If you open too many new accounts around the same time, you may be risking your credit score. Each time a new creditor pulls your credit history to determine eligibility your credit score takes a hit. Hard inquires such as these can deduct up to 5 points from your score and can give a negative impression about your credit use.

    Image source: barsen

  • Closing Old Accounts 3 of 8
    7 Things You’re Doing to Hurt Your Credit Score

    Part of the calculation in determining your credit score includes how long your credit has been established. If you pay off your oldest account and decide to close it out completely, you may be shortening the length of your credit history which can result in a score drop.

    Image source: imtfi

  • Taking Accounts to the Max 4 of 8
    7 Things You’re Doing to Hurt Your Credit Score

    Maxing out your credit card or other accounts can skew your credit utilization ratio. This matters when you are seeking new credit or a loan. It also will matter when you do not have the funds to pay off the balance from your purchases.

    Image source: xJason.Rogersx

  • Missed a Creditor Payment 5 of 8
    7 Things You’re Doing to Hurt Your Credit Score

    Just one missed payment can make your credit score drop. If you make a habit of missing payments, your credit score can drop significantly and you may be facing a lot of problems with your creditors who are trying to collect from you. 

    Image source: Wonderlane

  • Neglecting to Review Your Credit Report 6 of 8
    7 Things You’re Doing to Hurt Your Credit Score

    Every consumer is entitled to one free copy of their credit report annually. More copies can be obtained for free after being denied credit. You don't get your score included in these reports but you should still order them and review all of the listed data. Many credit reports contain errors that, if left uncorrected, can cause your credit score stay lower than it should. 

    Image source: americaswildlife

  • Blowing Off Collectors 7 of 8
    7 Things You’re Doing to Hurt Your Credit Score

    If you have unpaid accounts that have gone into collections, there is more harm being done than a constantly ringing telephone. You should own up to your outstanding debts and find a way to pay them in full (preferably before they even go to collections). If you feel you do not owe on the debt, make sure to have proof of your claim and get in touch with the original creditor or the collector to bring resolution to the situation. 

    Image source: MSVG

  • Vouching for Others 8 of 8
    7 Things You’re Doing to Hurt Your Credit Score

    You can do serious harm to your credit if you choose to co-sign a loan or credit card for another person. In the event the person you are trying to help neglects their responsibilities, you will be responsible for the debts incurred and your credit score can take a serious hit from their actions.

    Image source: Don Hankins

     

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