1. Pay late.
Even missing a bill’s due date by a few days may trigger a 30-day later reporting, which will damage your score and take a lonnnnnng time to come off your credit report.
2. Not pay at all.
Of course if missing one payment is bad, not making it at all magnifies the damage to your credit. A 90-day late is where things get really serious and your score may sink like a stone.
3. Max out cards.
One of the determining factors of your score is the ratio of available credit to your balances. So if you max out your cards, even if they are in paid on time, your score could be affected.
4. Have an account charged off.
Generally after a 90-day late, the next step is that the credit card company/bank, etc. charges off the debt, sending it to a third party for collections. This further damages your score.
5. Be a cosigner for someone who doesn’t pay.
If you cosign for someone else’s loan, whether it’s a car or an apartment lease or an installment loan, you are jut as responsible for paying the debt as they are! That means you better make sure they are paying on time because if they slip up, your credit will be affected – and you may not even realize it.
6. File bankruptcy.
Filing a Chapter 7 or 13 Bankruptcy is one of the most damaging events to someone’s credit score.
7. Foreclose on your home.
The other is foreclosure, which hurts your score for a prolonged period and in some ways is more damaging that Bankruptcy.
8. Get a judgment against you.
If you don’t pay your debt obligations, your lender or third-part collection agencies may take you to court, trying to secure a judgment for the amount you owe (plus late fees, penalties, and court costs.)
9. Apply for new credit like wildfire.
If you start filling out credit card and loan applications frequently in a short period, it signals financial desperation and risk to the credit scoring algorithms, and your score will go down accordingly.
10. Have no mix between credit and installment.
Remember that your credit score is calculation based on a mix of different types of credit – mortgage, installment, revolving, credit cards, etc. so make sure to overload on just one type.
11. Close old credit cards in good standing.
By cancelling a well-seasoned credit card or credit line that was in good standing, you’ve just effectively erased a positive track record of paying on time, so your score will go down as that’s taken out of the equation.
12. Rent a car with a debit card.
When you rent a card with your bank card, not credit card, they run a hard credit check to make sure you’re a good risk, which could lower your score.
13. Take payday loans, cash advances, or finance through rent-a-centers.
All credit is not created equal, and when you take out loans that are deemed risky or on the lower strata of the economic spectrum, it could hurt your score.
14. Finance a major purchase.
Additionally, when you finance furniture, boat, timeshare, or other big purchases outside of the big three – house, car, credit cards – it signals some risk to the credit bureaus.
15. Try to get slick with balance transfers.
Too many people try to outthink the credit card companies, taking out 0% interest or cash-back offers and moving balances around to stay one step ahead. That works…until it doesn’t work, and at some point it always doesn’t work, leaving you with a big mess.
16. Get a new cell phone.
Of course we need a new phone from time to time, but be aware that many of the cell phone companies run a hard credit check when you apply, which could hurt your score.
17. Open an account at a credit union
Likewise, credit unions run hard credit checks when you open a new account. We love credit unions for their service and great rates, but inquire if they’ll be running a hard credit check before you get started.
18. Not using your credit at all.
If you don’t use it, there is no established good payment history for the credit bureaus to judge you by!
19. Close cards with available credit.
When you do this, you mess up your ratio of debt owed versus available credit, which could negatively affect your score.
20. Dispute credit cards.
This may come as a surprise, but even disputing an account on your credit report may lower your score, at least temporarily. That’s because when it’s in dispute, the bureaus will remove it from consideration in their algorithms, which may erase a positive history, throw your debt-to-available credit out of whack, etc.
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