Common Mistakes That Destroys Your Credit Score

July 23, 2016

While it takes years to build great credit, it only takes a few months to destroy it. That’s why if you are new to the “game of credit” and how it affects your life – or if you are attempting to rebuild bad credit after making too many credit mistakes – it’s a good idea to avoid some of the triggers that can negatively affect your credit score for a long time.

1. Co-signing for many friends and family

Before endorsing friends and family for a loan, you may need to consider its impact on your credit score. Co-signing for a line credit could influence your credit reports, thereby, bringing about a drop in your credit score. As an underwriter, you assume the liability of guaranteeing full responsibility of the line of credit advance by the borrower, in accordance to the expressed terms. A default or failure to pay for the loan, by the borrower, brings down your credit score. If you are a victim to identity theft, and were fraudulently placed as co-signer, credit repair techniques can show you how to erase debt or debt collectors, like Allied Interstate.

2. Failing to make your payments on time

Making a payment on time is the most significant factor affecting your credit score. Late payments will affect your credit score, based on the frequency of the late payments. In fact, your first 30 day late payment can drop your credit score by 100 points or more. If you happen to miss your payment by a day or two, don’t worry, this isn’t such a big deal. However, once you reach the 30-day mark, expect a decrease to show up on your credit score, for missing the payment deadline. If your missed payment is due to not having the financial means to pay your creditor, instead of ignoring the situation, call them and discuss your circumstances. It is possible that your creditor will delay informing the credit bureaus of your late payment, in order to give you a chance to catch up.

3. Not checking credit reports

Remember that your credit report is an excellent tool to help you identify what your current financial problems are all about. It will tell you which exact aspect you need to work on, immediately. So, before you think about getting a debt consolidation loan, make sure you know what your credit report needs, and act on it. Learn how to dispute items on your credit report at, CleanUpCreditFast.org/tips/easy-way.

4. Applying for too many credit cards

When you’re getting a mailbox full of great offers such as 0% interest for a limited time, and 0% balance transfers, it’s hard to resist not accepting them. However, what seems to be a good situation can quickly turn into a dangerous one, if you end up with too many credit cards at once – particularly if they are credit cards for particular stores. Having multiple credit cards makes it tempting to put balances on them, so this situation requires careful discipline. If you don’t think you will be able to maintain that discipline, it’s best to avoid the situation altogether.

5. Frequent application of new credit cards

At whatever time you apply for a card or a loan, the loan specialist carries out an investigation known as the ‘Hard Credit’ request, which looks to survey your financial or credit profile. This activity will drop your credit score by 10% and it stays on your credit report two years. Continuous utilization of new charge cards indicates that you are a less desirable candidate for lines of credit from banks. Factual examination has demonstrated that having various (new) charge cards, in a brief span of time, is a sign of how terrible an individual handles his debt obligations.

6. Maxing out all of your credit cards

This mistake commonly follows those who fail to pay on time. Maxing out your credit cards lowers your credit score significantly and creates a situation in which many find it difficult to make payments on time. Remember that the amount that you owe on credit cards (and other revolving accounts) has a huge impact on your credit report. In this way, the aforementioned mistakes forms a vicious cycle that is hard to escape, particularly if you are in a period of attempting to rebuild your credit. Website information on credit repair can show you how to handle ‘code red’ situations involving debt management.

7. Destroying the plastic

Many people think that tearing up their credit cards and closing them down is a good way to say goodbye to debt forever. However, note that closing them down can actually lower your credit score (this can heighten your debt ratio and put yet another blemish on your credit history). So, try not to get rid of them, altogether. Instead, pay them off and hide them in a place that is highly inaccessible – this should help prevent impulse buying.