Things That You May Not Expect to Affect Your Credit Score

It is always best to keep a good credit score. There may come a time that you will need some financing, for example, a home renovation or the purchase of your dream car. If you don’t have a good credit score, chances are, you won’t be able to avail of loan to help you finance your project. This should be the reason to be aware of the things that affect your credit score.

It’s not uncommon to see people surprised over their credit score that has gone bad. This happens if you are not aware of all the things that may affect your credit score. You should read this article to know if you have committed the following that made you have that bad credit score.

Late Payments

Late payment of utilities, rent, phone, loans, subscriptions, and other services can affect your credit score. More so, when you are 30 days late with your credit card. Your card issuer will likely report you to credit bureaus, resulting in a drop of your credit score.

Several Applications for Credit

The more you apply for credit, whether a store credit card or a mortgage, you are causing your credit score to drop. This is whether your application is approved or not. A hard inquiry is always done on every credit application and this will affect your credit score.

Cancellation of Zero-Balance Credit Card

Cancelling a paid credit card may not give you any good. This is because it can raise your credit utilization ratio because you total credit amount has been reduced. The age of your credit history will also be shortened. It is best that you hold on to your credit cards even if they are already have zero-balance.

Use of a Single Card by Transferring Balances

If you have accumulated several cards, so be it. It is never advised that you transfer all the balances from all your credit cards and lump into one. Just like when you are canceling you zero-balance credit card, you are also shortening your credit history and you are raising your credit utilization ratio.

Lack of Credit Diversity

Be sure to diversify on things that you take on credit. Not having a mix of credit types is not pleasant to see credit bureaus. So mix up your credit to help your credit score go up.


High Balances on Your Credit Card

Lower balances of your credit card as much as possible. If they are near your credit limit, expect that your credit score will go down.

Unemployment leading to missed payment, co-signing loans for friends who missed paying their credits, and ignoring your credit report can also cause your credit score to drop.…