What Are Factors That Can Hurt My Credit Score?

How To Repair A Bad Credit Score?Not every country has a credit score rating for its citizens, but the United States does. In the United States, having a good credit score can be just as important as having cash in the bank. Your credit score is one of the most important factors when it comes to getting loans, rental agreement leases, and even job employment. Today we are going to look into some of the major factors that may be hurting your current credit score rating.

Late Credit Card Payments

When lenders are looking to lend out money to a prospective client they want to make sure they will get their money back with interest. One of the biggest factors that may be hurting your credit score is late payments on your credit cards. If your payment is due on the 4th of every month make sure you pay that payment on or before the actual due date. There are ways you can make things easier by setting up your account for automatic payments to be withdrawn from your checking or savings account each month. If you are having trouble making your payments on time because you get paid on unconventional days each month, you can request from your bank to have your payments be due on different days that may be more manageable for you.

Credit Report Mistakes

Did you know that sometimes there can be mistakes that show up on your credit report? It is important for you to periodically check your credit report to make sure that no mistakes are showing up on your account. If you do see any mistakes showing up on your credit score account, you can dispute the mistake by writing a letter to the appropriate credit reporting agency. Three of the largest credit agencies in the United States are Equifax, TransUnion, and Experian.

Revolving Utilization Percentage

Your revolving utilization percentage can be a possible factor for your low credit score. Revolving utilization is the percentage of available credit compared to what you are currently using. For example, if you have a credit card with a $100 credit limit and you are currently using $10, your current revolving utilization percentage will be 10%. Make sure that your revolving utilization percentage does not get too high. If your utilization percentage gets too high, for example, 80% to 90%, creditors will start to see you as riskier. Having a high revolving utilization percentage will also negatively impact your credit score. If possible, try to keep your revolving utilization percentage around the 10% to 30% range.

Late Rent Payments

Something that you may not have known is that late rent payments can negatively impact your credit score. It is optional whether or not a landlord will report late rent payments to a credit reporting bureau, but it is a possibility. If you are going to have one late payment coming up, it may be a good idea to let your landlord know ahead of time that you may be a few days late. If there is a late rent payment reported on your credit report, it can significantly hurt your credit score in the short term. Also if your landlord uses a rent payment service, rent payments may be automatically reported to credit bureaus. This is good news for you if you are consistently paying your rent payments on time, but is very bad news if you are late on rent payments often. Maintaining a good relationship with your landlord by making rent payments on time can be key to keeping your credit score in good standing.

Length Of Credit History

Having a short length of credit history may not necessarily bring down your credit score but it also may not help improve your credit score. The longer your credit account is open, the more data credit bureaus have. People who have just recently applied for a credit card may start with a low credit score, and over time can build up their credit by making consistent payments on time each month. Also, one thing to remember is that it may be a good idea to keep your first credit card if possible. Closing down your oldest credit card account may hurt your credit score, especially if your next credit card account is much newer than the old credit card account.

Co-Signing A Friend’s Credit Card

Co-signing for a friend’s credit card may be one of the riskiest things when it comes to hurting your credit score. When you help a friend get a credit card by using your own credit you are taking on the responsibility of them too. If your friend does not pay their credit card payments on time each month, this will end up hurting your credit. If you don’t want your credit score to go down, you will have to make your credit card payments yourself. For most people, helping a friend get a credit card using your own personal credit score is just waiting for a disaster to come. Be very careful if you decide to help a friend get a credit card using your own personal credit by co-signing.

Applying For More Credit Cards

When you apply for a credit card or loan there is a hard inquiry on your credit score. If you apply for many loans and credit cards in a short amount of time this can significantly hurt your credit score in the short term. Be careful when you are applying for new credit card accounts, maybe look into giving some time between each credit card application. Hopefully, this will help with lessening the negative effects of having too many hard inquiries on your account in a short amount of time.

Closing Down A Zero Balance Credit Card

Remember when we discussed revolving utilization earlier? When you close down a zero balance credit card this can cause your revolving utilization percentage to increase. If you have a few credit cards that you are not using, it may be best to keep the accounts open so your revolving utilization doesn’t increase dramatically overnight. Keep this in mind before you decide to close down one of your zero balance credit cards.

How To Repair A Bad Credit Score?

There are many ways to repair a bad credit score, but one of the easiest and fastest ways is hiring a credit repair agency. At Weller Legal Group, we have over 20 years of experience in helping clients with debt relief and improving the credit scores in the state of Florida. If you would like to schedule a free consultation on how we can help improve your credit score, please feel free to email JWeller@WellerLegalGroup.com or call us today at 1-800-407-DEBT (3328). We have offices located throughout the state of Florida including Clearwater, Lakeland, Port Richey, and Tampa.

Picture Credit: Crello