If you want to maintain a healthy credit score you should make your payments on time. Everybody knows that. If you want to raise your credit score, you should pay back recent debts and clear up errors on your report. But how about lowering your credit score? Now why would I go ahead and tell you how to lower your credit score? Well, it’s more of a “don’t do this” type of post. Here is a list of things NOT to do, because they will lower your credit score.
- Miss a payment. This one act is the worst thing you can do to your credit score. Just one missed payment can wreak havoc on your credit. If you become current on the account then the impact of that missed payment will lessen over time. But if you are going to apply for a loan and have a recent missed payment, that’s trouble.
- Using too much credit. There’s nothing wrong with using a credit card. In fact, using one wisely will help your credit score. But when you use your credit card right up to your credit limit, that’s trouble. Try and use less than a third of your available credit limit.
- Applying for credit cards. If you apply for too many credit cards (or loans) too fast, this activity will lower your credit score. The reasoning is that it’s a signal that you are in desperate need of money. This is not the type of person anybody wants to loan money to.
- Cancel an old credit card. Having a good credit score is all about credit history. The longer the history the better your score. The credit reporting agencies want to see a long history of you being responsible with credit. So when you cancel an old credit card, you are removing the backbone of your credit score. When you cancel this card, the long positive history you had with it goes away. Even if you don’t use this card anymore, just keep it, don’t cancel it.
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