5 Things that Hurt Your Credit Score

A credit score is one of the most important things to maintain. A credit score plays a large role in his financing for a home, a vehicle, or even a credit card for emergency expenses; it can be difficult to get the required financing if a good credit score isn't there. Unfortunately, a credit score is often much easier to hurt than it is to increase, so let's take a look at five things that can hurt the score. 

Late Payments

The biggest factor in determining a credit score is the payment history. Paying the bills on time is the best way to keep your score in good standing, but late payments happen to all of us from time to time. If there are frequent late payments on your credit report, you will have be able to explain the reasons behind them and be able to prove that these reasons and conditions were temporary and will not happen again. To fix this, start making payments on time or open a secured account where you make small purchases and pay the balance off in full each month. Within about 90 days, the credit score will rise.

High Balances

Keeping the majority of your credit open is a good way to keep your credit score in line. If you are using a high percentage of your credit, it shows creditors you are running the risk of getting into too much debt to pay it all back in a timely manner. You score is lowered to help creditors see that they should proceed with caution in extending more credit. To combat this, reduce your balances. Do not close accounts though, because this may prove more harmful than good because credit bureaus also consider how long you have had accounts on your credit file.

Short Credit History

If you've just turned 18 and started gathering credit, you will have a lower credit score than those who have a longer credit file. This is because there is not enough history to gauge how well you are going to be at meeting your obligations in repaying the debt. Leave accounts open and in good standing for a year or two to see a rise in credit score.

Frequent Inquiries on the Credit Report

If you're applying for credit every time very often, this shows creditors you are not good at managing your finances and may be attempting to live beyond your means. You do not need a high number of credit cards. The more credit cards you have, the more lines of credit you have to overextend yourself with. 

Types of Credit 

Credit cards are a revolving line of credit. Mortgages, auto, and student loans are fixed installment loans. The various types of credit will play a role in the credit score because they show stability. For example, those with a mortgage on their credit are living in the same place for an extended period of time. Those who have paid off or are paying off an auto loan are consistently using the same vehicle. Consistency and stability are important for a credit score.

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