5 WAYS TO RUIN YOUR CREDIT
Posted on: Jan. 26, 2017 in Debt, Credit, Credit Score

No one wants to have bad credit. However, damaging your credit is pretty easy to do and can happen faster than you may imagine. You may think you have some wiggle room to make mistakes, but unfortunately that’s not the case.  

Here are five ways to ruin your credit fast.

  1. Miss your payments. If you borrow money, you must pay it back. Not making timely payments, or skipping them altogether, is a sure-fire way to damage your credit score. Lenders will decide if you’re a responsible borrower based on how well you’ve paid back loans in the past. Recent missed payments will affect your score more than older ones, even if you were further behind back then. Don’t assume because you’re “only” 30 days late that it won’t matter. If it’s recent, it matters.
  2. Bury your head in the sand. Credit reports should be monitored regularly. You can request a free report from each of the three major credit bureaus once per year. Reviewing your report can help you identify errors and then fix them. If you aren’t paying attention, there could be any number of inaccuracies bringing your score down.
  3. Use too much of your available credit. Borrowers are advised not to use more than 30% of their available credit. Ideally, however, you’ll not use more than 10%. If you have credit available and refrain from using it, you’ll appear more responsible and in control than someone with a maxed out card.
  4. Close your cards. Closing old cards may sound like a good plan, but consider our previous point. If you have a card that’s paid off, you’re well below that 10-30% utilization mark. This is a card that helps you look good! Leaving it open creates a better debt to available credit ratio that works in your favor. Also, the older a credit account is, the better. A long history with one creditor can help show your stability as a borrower.
  5. Give up using credit. If you stop using your cards, you stop building a credit history. A gap in usage will cause your score to fall because there will be no good usage to build it up. Rather than buying things you don’t need just to use the card, try using it for things you already have the money for and then paying it off at the end of the month. You’ll avoid racking up debt while still showing responsible borrowing.

Having a healthy credit score can help you make larger purchases and increases your borrowing power. However, even those with a low score still have options. If you need auto financing but your credit is keeping you from getting approved, CreditYes can help with our bad credit auto loan program! We can match you with a dealership in your area that will be with you ever step of the way. Our service is fast and free. Fill out our secure online application and get behind the wheel of your next car today!



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