Five Ways You Could be Hurting Your Credit Score

Having a great credit score is the best way to take advantage of the lowest rates and purchasing benefits that are out there so if your credit score is not in good shape it could be costing you hundreds of dollars each month in interest.  We know that late payments are a huge factor, but take a look at a few other ways your credit score could be negatively affected.

Balance is Too High

A large factor of your credit score is the debt balance compared to the available credit, so the smaller that window is, the more your score is hurting.  If you continuously carry a high balance on your account, then credit limits may no longer be increasing so you are stuck at limits.  Begin paying down balances and not using the card for additional purchases to increase the gap in available credit.

Not Regularly Using Accounts

For accounts that you have paid and keep a zero balance and have left it open could be hurting your score.  Regular use such as charging, then paying off the entire balance by the statement due date will increase your score to show that you are a responsible borrower by not carrying over a balance to the next month.

Opening New Accounts

Each time you have a lender check your credit the scores will decrease, so limit opening new accounts, especially if you do not need it, as the inquiry will stay on your report for the next couple years.  Find a great mortgage rate that you can stick with, and a credit card with low interest and rewards, and you are golden.

Not Checking Credit Report

Checking your own credit report does not lower your score at all, so take on top of your report.  Not checking your report is setting up for fraudulent activity to be present on your account without you even knowing.  Not only could accounts be used, but depending on the severity, new accounts could be opened in your name.

Taking on a Debt Settlement

If your financial situation has hit and all time low and you have decided to take on a debt settlement, then you can expect your score to take a hit.  It shows the lender you can no longer handle the account, so the account may be frozen or closed, so depending on how many accounts, you could be starting from scratch when the settlement is over.

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