Factors That Can Ruin Your Credit

Do you know what hurts your credit score? This article discusses the most common factors that can badly affect your credit history. Check out the list below and know which things should be avoided.

Overdue Bills. Frequently missing or delaying on your payments will surely send a negative impression to any lender who will check your credit report. Under the FICO scoring system, payment history makes up 35% of your total score. Hence, even occasional delays with your payment can cause your score to drop by a hundred points or more.

Most creditors give at least 25 to 30 days of grace period. As a borrower, it is your duty to submit your payment on or before the due date. If you think you will not be able to meet the deadline because of an unexpected financial emergency, the best thing to do is call your creditor and inform them about your situation. Request your creditor not to report it as late payment.

Maximized Credit Lines. Do you often maximize your borrowing limit? If you answer yes, then your credit score can drop by as much as 10%. According to financial experts, consumers must leave at least 50% of their credit limit free from charges. Thus, even if you own a credit card with a low interest rate, be sure to keep your monthly charges minimal.

Too many accounts. The types of accounts you have also affects your final rating. Having a lot of credit cards will not necessarily raise your score. What lenders want to see is a borrower’s capability to handle debt effectively. It’s not really about how much you spend with your credit card or how many cards you own. What’s more important is how timely you are in making payments.

Closed Old Accounts. Closing your oldest credit card accounts can do damage to your rating. Remember, when you close these accounts, you are also erasing the oldest parts of your credit history. Furthermore, before deactivating a credit card, see to it that you do not leave any unpaid charges.

Errors in your credit report. Sometimes, despite your best efforts to maintain good credit, errors in your file can unfairly pull down your credit rating. What can you do about it? To make sure that your credit report contains correct information, check your file at least twice a year by ordering a copy from each of the three credit reporting bureaus. If you find errors, do not hesitate to send a dispute letter to the consumer credit tracker that issued your report.


About the Author:

Suzy Vanstrusen is a credit analyst and a writer on the website EZCreditRepairSolutions.com. She has been providing consumers with tips and wise information about credit repair as well as helping you out more with your bad credit loans.  Copyright © 2010

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