A person's credit score has become very important in this day and age. Your score is what creditors and lenders look at to quickly decide if you are a good or bad risk to lend credit to. It is important that you learn what types of actions hurt your score so that you may avoid them.
1 - Late Payment
Over one third of your credit score is tied to your payment history. Repeatedly being late on payments can and will hurt your score. Pay your bills promptly to avoid this.
2 - Failure to pay a bill
Ignoring a due payment entirely is even worse than paying late. Every month you do not make a payment is one month closer you are to having your account charged off.
3 - Account Charge Off
If a creditor thinks you are not going to pay your debt ever, then they will charge off your credit account. This is one of the most damaging reports that can appear on your record.
4 - Being written off to collections
Credit companies almost always use 3rd party collections agencies to attempt collection of severely delinquent accounts. It is rare that the original creditor will not have written the debt off before selling it to the collections agency. Collections status indicates that the creditor had given up attempting collection, and sold it off to a 3rd party.
5 - Loan Default
Defaulting on a load is similar to a charge off on a credit card. A default basically shows that you failed repeatedly to make repayment on your loan as initially agreed upon in contract.
6 - Bankruptcy
Bankruptcy is a plague for your credit score. In most cases it is expected that you seek alternative methods of debt handling before declaring bankruptcy.
7 - Foreclosure
Failure to make your mortgage payments on time will eventually lead to foreclosure. This is essentially just another form of default, but it leaves you homeless if you do not have someplace to go after you lose your house.
8 - Judgment
Having a judgment on your record shows that not only were you not paying your bills, but the court system had to get involved to force repayment. Both terms hurt your credit record, but a paid judgment is better than an unpaid one.
9 - High balances
Having high balances means high utilization of credit in relation to your credit limit. This is frowned upon, and will lower your credit score.
10 - Maxed lines of credit
Maxed credit cards and over the limit credit cards cause your utilization to be 100%. This is not good for your credit score.
11 - Closing cards with balances
If you close a credit card and it still has a balance, the limit on that card drops to $0 while your balance stays at what it was. This essentially makes your credit card look maxed, and will make your credit score drop.
Photo Credits: Logan Antill
Related Posts -
Improve Your Credit Today Having blemished credit is both costly and stressful, but it does not have to be the end. Your situation may seem incredibly hopeless, but bad credit does not last forever. There are many things that can be done to improve your credit score. 1 - Stop using any of your...... -
How to Improve your FICO Score It is important for you to understand that trying to raise your FICO score is quite similar in nature to losing weight. There is no quick fix and it is absolutely going to take time. Quick fix efforts for improving your credit score can most certainly back fire if you...... -
The Dos and Donts of Credit Scores Pt 2 In an earlier post we talked about the Do's for good credit, so now it's time to consider the Don'ts! A credit score is a really important indicator on how likely you will be to default on a credit card or a loan. Your credit score is determined by a...... -
The Dos and Donts of Credit Scores Pt 1 A credit score is a really important indicator on how likely you will be to default on a credit card or a loan. Your credit score is determined by a number of different factors, including your payment history, the amounts of money that you owe, the length of credit history,...... -
The Meaning of a Credit Score I do not suppose you know what your credit score means do you? Do you really? I think you might want to take another moment to think good and hard on that, because in September of 2004, the Consumer Federation of America reported that of one thousand Americans they surveyed,......
Related Websites -
Starting a Baseball Card Collection There are more collectors of baseball cards than there are of any other type of sports card. It makes sense, when you think about the fact that baseball cards have been in production far longer than any other form of sports card. Baseball card collecting is a pastime rich with...... -
Creating a Sports Card Collection Since the 1800s, it has been a normal part of our culture to want to create a sports card collection. At first, boxing cards were especially popular, and then during the early 1900s it became popular to collect baseball cards as part of a sports card collection. The thrill behind...... -
7 Steps to Improve Your Credit Score Whether you think we’re out of the recession or not (I would bet “no” based on the responses last week), it’s always important to play a little personal finance defense. Today, the topic is on credit scores and how to improve your score by taking a few small steps. These...... -
How Important Is Your Credit Score, Really? A lot has been written about the importance of your credit score, but how important is it really? It all depends on what you're doing in your life at any given time. For example, if you're thinking of buying a home in the next few months, then your credit score...... -
Sometimes You HAVE to Ignore the Right thing to do! I Cancelled my Bank of America Credit Card Today I almost never lose my temper with customer service reps, and it usually gets me what I want or at the very least closer to my goal. Whether we are talking about the cable company, cell phone companies, and most financial/credit card companies - I usually get what I want.......
- Military Payment Paper Money US Coins Paper Money
- New Balance Womens Shoes
- Credit, Charge Cards Trading Cards Collectibles
Categories:
Personal Finance, credit, credit cards, credit score
Tags:
0 comments ↓
There are no comments yet...Kick things off by filling out the form below.
Leave a Comment