Are you asking what hurts your credit score and how you can avoid those things? Read this article to learn the top things to avoid.

How bad or good is your credit?

Having a good-standing credit score can be the deciding factor between getting a new car, applying for a loan on the house, or getting lower credit card interest rates. However, many aren’t aware of things that can hurt your credit score without you realizing it.

What hurts your credit score? The answer to this question can be found below in the article, where we will provide you with the 5 things that you should avoid to maintain your credit score.

What Hurts Your Credit Score?

There are a couple of things that can affect your credit score. Keeping an eye out for these things and making a better decision an help you to avoid common credit score mistakes.

  1. Late Payments

When you borrow money or take out a loan of some type, the primary concern of the lender is whether or not you’ll be able to pay the money back. When borrowers make late payments, it gives the appearance that the borrower is unreliable.

Lenders take note of late payments, and making one payment late can directly affect your credit score. When making payments, either pay in full or set up a minimum payment plan with your lender.

  1. Maxing Out Credit Cards

If it is possible, refrain from maxing out your credit cards. Overutilization is when you use more than 90% of your credit card usage. Using this much of your credit card can make the credit company begin to worry because you have more debt at this point than credit.

When you are using a credit card, it is essential to limit the use of it to 30% utilization or less. Also, be careful about canceling credit cards because by canceling it, you lessen the amount of credit you have, and it can negatively affect your credit score.

  1. Don’t Apply For Extra Credit

If you don’t need the credit, then don’t apply for it. Some places offer you a customer discount for applying to use their department store credit cards, but by all means, refrain from signing up for these programs.

By applying for the card, it will trigger an inquiry into your credit. The more credit inquiries you have on your credit history will send off red flags to creditors, and you can risk lowering your credit score with each inquiry.

  1. Use Paper and Plastic

There should be a balance between using cash and using your card. Some people tend to think using cash for everything won’t harm their credit, but in some instances, it is damaging your credit.

By using plastic and cash, it can convey to creditors that you are responsible and reliable. Also, it shows that you can handle having a credit card without going overboard.

  1. Debt Consolidation

Can debt consolidation affect your credit score? Yes and no.

It can affect your score positively if you make consistent payments towards your debt, lowering the amount owed overtime. However, if you neglect to make payments and fall behind, debt consolidation can lower your credit score.

Grow Your Credit

When it comes to what hurts your credit score, many of these things can be avoided if we simply take the time to think before making a choice. In the long run, we want to maintain the good-standing credit scores that we have so that we can afford the things we want later on.

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