8 Essential things that have a negative impact on your credit score

If you have a poor credit score, you may be denied a loan when you need the most. Thus, you must pay enough attention to your credit score, if you want to prevent such an embarrassing situation.

What hurts your credit score?

Here are 8 things which hurt your credit score. You should be careful enough and prevent these 8 things listed below from hurting your credit score.

  1. Making late-payments – Late payments to your creditors may hurt your credit score. Thus, if you want to prevent your scores from getting hit, you must pay your debts on time. A single late payment may drop your score by many points.
  2. Account sent to collections – If your creditor has sent your debt to collections, it will have a negative impact on scores. Collection status shows on your credit report, which in turn hurts your score.
  3. Charged off debt – When you miss your payments on your debts more than once, your creditor may charge off your account. This may stay on your credit report for almost 7 long years.
  4. Closing accounts – Never close your old accounts as this will hurt your credit score. Closing your accounts which still has balance is not good for your credit scores.
  5. Too many inquires – If you have too many inquires on your credit report, it will account for 10% of your scores. Stop applying for several loans or credit cards.
  6. Maxed out credit card – You must use your credit balance only up to 50% to prevent your card from getting maxed out. If you use the full available balance on your credit card, it will lower your credit score.
  7. If you get judgments – A judgment reflects that you did not pay your debt and so the court was involved to make you pay your debt. Judgments on your credit report may hurt your score.
  8. Too many accounts – If you have too many credit card accounts, your credit score will reduce by 10%. You must have several types of credit like a mortgage or car loan other than your credit cards under your name. This may help you to raise your score.

You must also review your credit report and check if there is any erroneous reporting. As any inaccurate reporting may decrease your credit scores by several points.