5 WAYS TO KILL YOUR CREDIT SCORE
THE credit score range is usually from the worst to the best possible credit score
i.e from 300 to 850.This score is determined by certain factors such as length of
your credit history.how regular you have been in paying your bills on time etc.
A poor credit rating means that you will have to pay higher
rates of interest on your loans and will have less savings for yourself.
LATE PAYMENTS
Your credit card payment history is crucial for getting a
good credit score.On the basis of your payments history a lot of decisions are made
as it shows how responsibly you manage all your credits.
One surefire way to kill your credit score is to skip payments on your bills or make late
payments.This can bring down your credit score very fast. As your payment
history accounts for 35% of your credit score(in the computation of credit
score).Even if you have a good credit score and your credit history has been
very clean and you skip even one payment on your credit card.it can drastically
bring your credit score down by nearly 100 points.
On the other hand,if you continue to maintain a clean
payment history record on your credit card it will definitely help in repairing
your credit score and bring it up.
EXCESSIVE USE OF YOUR CREDIT LIMIT
Pushing your credit card account to the limit in other words
using your total credit limit in one go can definitely kill your credit score
to a great extent.You should not use more than 25% of your credit limit.By
utilising the entire limit you are giving an impression to the creditors that
you are a high risk person with little or no self control over his spending and
finances.As you have used up your total credit limit and if you are not in a
position to pay it off on your payment due date.But will settle for only paying
minimum amount due and attract finance charges on your credit card.This will
create a very negative of you in the eyes of the creditors.
So one should try to keep their used credit limit to not
more than 25% every month to keep a good credit score
CLOSING CREDIT CARDS
The length of your credit limit is one of the factors that
is taken into consideration at the time of computing your credit score.In case
you have too many credit card accounts and would like to close some of them
,this decision can definitely destroy your credit score to a certain extent.Your
different credit cards payment history
has a direct and positive impact on your credit score due to which you have a
perfect credit score.
Now in case you plan to close your 7 year old credit card then this will kill
your credit score as that 7 year old credit card reflects a positive reference
to your credit history.
It will have a negative impact on your credit ratings.
Having many in store cards
Signing up for too many in store cards can kill your credit
score.No matter how diligent you are in handling your accounts and believe that
you pay off the bills due on the in store cards on time.But despite that it is
not good for your credit score and it signifies that you have opened too many
lines of credit in a very short span of time.and this might create a negative
image about you and reflect you as a high risk borrower.
FINES DUE TO BE PAID
You might wonder as to how petty fines like parking ticket or an
outstanding library fee destroy your credit score.If you have an outstanding
fines accounts with the municipal government ,your account is handed over to
the collection department.And if you do not outstanding amount,it can completely
burn your credit score by a very high number of points.So always pay your dues
and outstanding fines on time to avoid your perfect credit score from getting
killed.
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