Five Things You Didn’t Know That Can Ruin Your Credit

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Five Things You Didn’t Know Can Ruin Your CreditMaintaining a good credit score is an important part of financial health. A high credit score ensures great deals on financing, while a poor credit score will cost you more for your home, car, and other major purchases. While some actions; like paying bills late; are known ways to reduce your credit score, there are some things that are less commonly known. Keep your credit score high by avoiding these mistakes.




Creating hard inquiries

An important component of your credit score involves the number of hard inquiries within a twelve month period. Hard inquiries can be generated from something as minor as getting a new cell phone, renting a car with a debit car, or requesting a credit limit increase on an existing account. Each of these actions will generate a hard inquiry when your credit is checked to approve the transaction. Limit hard inquiries to less than 3 in a calendar year, otherwise your credit score could take a hit.



Unfortunately, mistakes on consumer credit reports are commonplace. If you plan on making a major purchase, it would be wise to request a copy of your credit report a few months prior to the planned purchase date. This will allow you to dispute and repair any errors. Some consumers find it helpful to utilize a credit repair service provider for best results.


Closing Old Accounts

Longevity is an important part of your credit history. While it may seem tempting to close out old accounts, doing so can drastically shorten the length of your credit history, and also increase your credit utilization. If you are not using a particular account, consider the impact to your credit score if you do choose to do so.


Pay Every Debt

Even parking tickets or unpaid library fines can harm your credit score if ignored. No debt is too small to not be paid. Remember, any debt that becomes delinquent has the potential to be reported to the credit bureaus, so pay all of your bills, or establish payment terms that will keep your account in good standing.


Becoming a Small Business Owner

For many, owning a business is a dream. Unfortunately, many small business owners have to leverage their own personal finances to open the doors. This means a personal guarantee on company debt. Default could become a nightmare for your credit score. Be sure to manage this debt just as you would personal debt, and ensure that it is paid timely.


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