3 Top Credit Score Killers
Bad Credit Score? One of These Three Things Might be the Culprit
Credit card debt is often a frightening and baffling thing, especially when you see the interest pile up and the amount of debt increase. However difficult it may be, the key to beating credit card debt is not to lose hope, and continue to pay it off. It is important to keep in mind that those efforts will only be rewarded if you avoid these top credit score killers, and stay consistent with payments.
The following are just some issues that may wreak havoc on your credit score if left unchecked.
- Length of time credit has been established
One of the biggest credit score killers tends to be the length of time credit has been established, as well as the length of time there has been outstanding balances. Having a high balance for a large period of time indicates to lenders that you borrow without really paying anything back, or that it takes you a long period of time to repay.
Both of these are flags of unreliability for lenders, so it is essential that credit card balances are kept as low as possible, and paid off in full during every statement.
2. Amount of Credit Used
The amount of credit you are using is also a credit score killer, especially if you are using over 50% but are unable to pay the amounts off in full every month. It might be tempting to let the balance sit, but this is an incredibly detrimental strategy.
This shows lenders that you are not able to pay back your balance, but you continue to borrow – another surefire way to bring down your credit score.
3. Late Payments
No matter how hard you try to bring down the amount of credit used, or try to pay off credit cards that have had balances on them for long periods of time, none of that will matter if the payments are late. The effects late payments have on credit scores can often be devastating, and become a setback as you are trying to build your credit.
Even if you are only able to make the minimum payment at the due date, just pay it. Do not procrastinate, or ignore payments. It will kill your credit score, and make it that much harder to bounce back.
These are just some of the most common ways people kill their credit scores, and should ideally be avoided at all costs. To learn more about how to manage credit card debt effectively, please contact us.