There are a lot of myths out there about things that can hurt your credit score. And since March is Credit Education Month, we’re offering some free credit counseling advice. Did you know that checking your credit score or requesting a copy of your credit report actually has no impact on your score? But here are some things that can:
Situations That Can Lower Your Credit Score
1. Applying for too much credit.
If you apply for too much credit in a short period of time, it can lower your credit score. Each time you apply, a credit inquiry is placed on your credit report.
2. Using your debit card to pay for a rental car.
Most companies will ask you to pay with a credit card because if you use your debit card, you will also have to allow them to perform a credit check on you, which will result in a hard inquiry.
3. Having a large amount of credit card debt.
Using your credit card(s) to pay for things a lot within a short period of time on one or more credit cards. Even if you pay it off in full each month on time, it can lower your credit score.
4. If your balance is too close to the credit limit.
It’s never a good idea to max out your credit card or credit cards. Credit advisors recommend that a credit usage ratio of less than 50% is a healthy amount.
5. Not returning a library book.
If you do not return the book when it is due and you incur late fees that go unpaid, the library may very well send you to a collection agency and report to the credit reporting agencies. Similarly, this too can happen with any outstanding medical bills, gym memberships (if not cancelled properly), utility companies and parking tickets. If the business have the time and resources to follow through, these occurrences could lower your credit score.
Credit is a very powerful tool and your credit score can determine whether or not a lender is willing to take a risk on a borrower. Having good credit can help you significantly in your financial goals or hurt you significantly, and for a very long time if not managed properly.
If you’re looking for your own personal credit advisor to help you manage your finances and credit card debt, call 800-769-3571