Things That Can Hurt Your Credit Score (or Rating)
Credit may be hard to build and easy to destroy. Some consumers spend years trying to rebuild their credit and raise their credit rating score. Many people’s credit rating score suffers and they have no idea that it suffers nor do they know how to improve it. It is important to know the factors that hurt a credit rating score so that consumers can maintain their good credit standings.
How You Can Harm Your Credit
- Maxed out credit cards can harm credit. Credit card balances that are over the limit send up a red flag to lenders that you are not able to handle credit. Maxed out credit cards can hurt a credit rating score—especially if you want to make a big purchase such as a home.
- Paying bills late can harm a credit rating score. Late payments can do a great deal of damage to a credit score. One of the first things that lenders look at when they pull your credit report is the payment history. Even with decent credit, lenders may not offer you a loan.
- Consumers should never carry high credit card balances. No matter what the reason is for high credit card balances, they can potentially harm your credit score. Lenders look for consumers that have demonstrated their ability to manage credit appropriately.
- Defaulting on loans can hurt your credit rating score. You are telling lenders that you have no intention of repaying your debts when you default on loans. Defaults can turn into charge offs that can make your credit score take a huge dip if you do not take care of it.
- Having too many credit cards with high balances is not good. If you use credit cards to pay your monthly bills so that you can stay ahead of your bills, you may be lowering your credit score without even knowing it. Many credit cards with high balances will hurt your credit rating score.
- You can hurt your credit score by having too much credit. Mortgage lenders expect you to have debts under a certain percentage to receive a loan. Having too much credit can push your percentage too high to receive a home loan and lower your credit rating score in the process.
- Having too many inquiries on a credit report is not good for you. Inquiries remain on your credit report for up to two years. Too many inquiries can lower your credit score and prevent lenders from offering you credit.
- Owing money to banks can harm your credit score. Banks will eventually put the negative information on your credit report and your credit rating score will lower. Lenders will not likely lend to you if you owe money to another bank.
If you manage you credit properly, you can maintain a good credit rating score. A good credit rating score can make the difference between getting denied or approved for credit. The important thing to remember is to handle credit appropriately so that you can increase your credit score and send a positive message to lenders.