The Surprising Things That Can Impair Your Credit
You would be shocked at a few of the things that can damage your credit. Often we take measures that we think are best for our finances and our budget but these very same things can harmfully affect your credit score.
For case in point, closing a credit card account. This may seem like a sound thought as if the account is closed then you do not have the possibility for the debt. Nonetheless, the difficulty arises because your credit score is partially based upon your sum of existing credit compared to your quantity of money owing. If you no longer have the credit card then you no longer have the credit on hand and your credit score gets dinged.
If you own a credit card but you never use it the similar thing can happen. You might think that if you don’t use it, it can’t hurt you but a vendor can rescind a credit card if it is never used and then again your credit to debt ratio goes down and your credit score goes down with it.
Another thought is how much of your credit that you use. If you have a large running balance on your account it affects you unhelpfully, even if you pay it off every single month. Try to keep your borrowing below the 30% of what is on hand mark. The running balance holds more weight than the fact that it is repeatedly paid off.
Library fines and parking tickets may seem benign but they can end up on your credit report if you pay no heed to them, the same for past due recurring bills such as a cell phone or a utility bill. As soon as a bill is referred for collections it can show on your credit report as a negative.
Anytime you apply for credit an inquiry will show up on your report. Too many inquiries can negatively influence your score. Revolving credit, such as department store cards, is also looked upon as a negative so getting 20% off just for applying for a department store card is maybe not worth it. Just say “no, thanks”.
If you don’t check your credit report on a regular basis you could be causing yourself some tribulations. It is estimated that up to 75% or more of all credit reports contain errors or inaccuracies. You can dispute anything on your credit and you can get the problems removed but if you find out after you have been denied credit, it is a little too late. Check your report repeatedly and deal with the imprecise information quickly. You can get a free credit report from each of the credit bureaus one time per year. You should do it at least that often.
The best way to preserve your good credit is to avoid any tribulations in the first place. Even so, you may still occasionally find mistakes on your report. You can dispute them to repair your credit with the support of a professional credit repair service or you can do it on your own.
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