9 Things That Will Hurt Your Credit Score?

Your credit score, a three-digit number that are ranging from 300 to 850 points, plays a significant role in our day to day life It lets potential lenders how well we can manage our finances. Below are nine things that can affect your credit score. Please pay close attention to it.

Missed payments

Ignoring your bills is much worse than paying late. Try not to stick your head in the sand and make the situation worse than it already is. After about six missed payments lenders typically charge your account off. This account status is one of the worst items on your credit report.


Late payments

Your payment history tends to be very important in the calculation of your credit score. If you don't fulfill your financial obligations on time, you may lose 100-200 points. It is important to make timely payments to maintain a positive rating.


Heavy debt

Credit bureaus calculate the ratio between your balance and available credit. If you borrow too much, the percentage of debt/available credit (also called utilization ratio) goes up. It will hurt your credit score. Always try to keep your debt lower than 30% of your spending limit.


Collection agencies

If you don't eliminate your debt, lenders can hire third-party agencies to collect payment from you. The name of the collection agency and the amount of money you owe will be listed in the report. Avoid these call whenever you can.
It will show that you are a high risk customer.


Cancelling old accounts

Fifteen percent of your credit score is determined by the length of your credit history. If you close your old accounts, you shorten your credit history.
Closing cards with available credit
When you cancel your card, the amount of available credit reduces, but your debt remains the same. Thus you increase your utilization ratio. That is not good for your credit score.


Declaring bankruptcy

Bankruptcy can put your credit score down into the lowest ranking. You will need to work hard to re-establish good rating. Look for alternative solutions to eliminate your debt. You can consult with a credit counselor or a debt relief agency.


Numerous inquiries

Applying several credit card applications within a short period of time will damage your credit score. The creditors can suggest that you are in a serious financial trouble. Don't apply for any plastic that captures your attention!
Having credit cards only
Your credit report reflects what types of credit you have had: credit cards, charge cards, retail accounts, and installment loans. It is advisable to have a healthy mix of credit to make your credit score higher.