5 Things That Are Hurting Your Credit Score

5 Things That Are Hurting Your Credit Score

Building good habits is the best way to achieve development and open the door to numerous opportunities. But sometimes, a lack of knowledge could hurt those opportunities. There are various ways through which you can improve your credit score but also lower it without you even knowing.
These five things that are hurting your credit score are important to know because awareness will give you the necessary information to avoid problems. Simple actions could greatly impact your credit score. At first, they may seem irrelevant, but every action matters.

Late Payments
A credit card gives you flexibility and acts as an additional payment option that you can use in your daily life. But making late payments is the quickest way to lower your credit score, especially when it is a constant action. Paying your credit cards two days before the due date will positively impact your score and grow your credit history.

Canceling a Credit Card
Canceling your credit card might seem like a good option when you keep missing payment dates or constantly struggle with maxing it out. If you decide to cancel your card, this will erase a part of your credit history, which impacts your overall credit. The best way to deal with this is to keep your card active, use it only when necessary, and always pay it on time.

Too Many Cards
Sending applications to many credit cards will bring your score down but will help you rebuild a low credit score when you get approval and have a good credit history. The ideal number of credit cards is between two or three, especially the ones that give you benefits like no fees, points, and cash-back deals. Paying your cards on time, using them constantly, and only applying to three will benefit your overall score.

Big Charges
Charging a large amount of money on your credit card will lower your credit score until you pay that debt off. If you pay it, your score can increase, though. After a big purchase or maxing your credit card, financial institutions must make sure that you can pay that debt and lower your score to prevent other big purchases from happening.

Collection Accounts
After constantly missing payments on institutions like housing, hospitality, or credit cards, those institutions will file for collection against you, damaging your records. This action will hurt your credit score, credit history, and future applications by limiting the opportunities and answers that you get. If you fall into a collection account, most institutions will stop considering this after seven years.

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