Your credit score is incredibly important when it comes to your finances. It’s important to know what affects your credit and to what extent. In this article, we will be discussing three factors that hurt your credit score the most.

We’ve all seen commercials emphasizing the need to check our credit scores. Individuals who are on top of their scores have confidence and can improve their buying power or stay on track. Those who have let their score go unchecked may have problems they don’t know about or cannot overcome. Check out America's Best Bookkeepers

These dramatic representations of good credit vs. bad credit are a reality. You may not find yourself in those ridiculous situations depicted in the ads, but you can find yourself unable to buy a home or a car. Even worse, you can make those purchases but with unbelievably high-interest rates. Despite ads and would-be creditors stressing the importance of good credit, most people don’t give it any serious thought.

In this article, we are going to discuss three factors that hurt your credit score so that you can watch out for these financial behaviors and start improving your score.

 

  1. Making Late Payments/No Payments

Making late payments on your credit cards, loans, or any credit reporting accounts makes up 35% of credit scores. The simple solution is to make your payments on time, every time. One or two late payments adds up quickly. You don’t want to see your credit score drop drastically because you can’t make payments on time.

 

Making no payments will have collections knocking at your door. This is the worst-case scenario for your credit score. Avoid this disaster by making sure you are aware of the monthly payments you owe.   Check out America's Best Bookkeepers

 

  1. Maxing out your Credit Cards

Idealistically, you should be using no more than 20-30% of your available credit. Keeping your credit cards maxed out at all times looks terrible to lenders and ultimately drops your credit score. Emergencies happen, and that’s why we have credit cards, but in case of emergency, make sure you make those payments on-time and are paying more than the minimum payment. That way, you won’t get stuck in debt or only paying the interest.

 

  1. Applying for multiple credit cards over a short length of time

When a lender sees that you have opened up several new credit cards, this sends up a red flag. It’s pretty simple; creditors assume the more credit cards you’ve opened up, the more you’ll be buying things on credit. To them, this possibility means that you may not have the finances to pay them back. This is most important when applying for mortgages. Check out America's Best Bookkeepers

 

Places to check your Credit Score

Free and fee required websites that do credit checks are out there. The top two we recommend are FICO and Credit Karma. Both of these websites offer a surplus of information when it comes to your personal credit. You will find everything you need to know about your credit score. You will also find a lot of information about how to improve your credit and refinancing options. Once you’ve taken the leap to check your credit score on one of these trusted sites, take some time to familiarize yourself with the website and all they offer.

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