What Hurts Your Credit Score?

Do you know the factors that may terribly damage your credit rating? Are you aware of the particular records that you need to steer clear from? In this post, we will discuss some harmful information that must never be seen in your credit report. Recognize these details and do your best to avoid them.

Overdue Bills. Examine the credit history section of your report. Do you have late payments or past due charges? If so, you should know that it will likely be pulling your credit score. Remember that your payment history comprises 35% of your overall credit score. A single late payment could notably cause your fico score to drop by several points.

To prevent late payments, what should you do? Generally, lenders are required to give a minimum of 21 days before reporting late payment. It is your duty to be aware of your deadlines and make your payments on time. Nonetheless, if an unexpected situation comes up that prevents you from making a prompt payment, get in touch with your creditor without delay.

Explain your circumstances and let them know that you’ll be submitting your payment within the following days or weeks. Ask your creditor not to report your late payment if you can pay on the date you promised. Oftentimes, if you demonstrate your determination to pay your debts, a lender will grant you the chance to make it up.

Maximized Credit Lines. Do you often maximize your limit? If yes, then you are inflicting damage to your credit history. Financial experts advise keeping at least 40%-50% of your credit line free from charges. Maximizing your limit will not just reduce your score, it can also send a negative impression to other creditors.

Too many accounts. The varieties of credit you have comprises 10% of your FICO score. If you have several credit cards in your name but without other types of credit, your credit rating may be reduced. Preferably, you must obtain at least two to three types of accounts which are all in good standing. Besides credit cards, a mortgage or a car loan under your name can increase your credit score.

Closed Accounts. Terminating your oldest credit card accounts simply because you do not use them is much like deleting the oldest portion of your credit history. You do not have to use your old credit cards often particularly if they have high interest rates. Nevertheless you can use them to make small purchases from time to time just to prevent them from automatically closing.

Errors in your credit report. Although you may do your best to keep up with your obligations, you may still get a low score due to erroneous reporting. The truth is, errors and unauthorized charges tend to be a recurring problem in credit reporting. To ensure that these errors are corrected, you need to personally check your credit report at least every 6 months. If you find false details, send a dispute letter to the credit bureau that issued your report and request for an investigation right away. If you do not know what to do, you may also ask for a free credit repair guide from a trusted credit counseling agency in your area.

 

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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