Seven Mistakes That Trash Credit Scores

 In Credit Builder, Credit Repair, Credit Scores, Raise Your Credit Score

We all know the importance of keeping a high credit score or FICO score, right?  You know how to budget, pay off your credit cards, and pay your bills on time. Many people do damage to their credit score accidentally, partially due to credit score myths that exist, but also due to having an unclear understanding of what goes into a credit score. These are seven common mistakes that trash credit scores you should know.

No Credit

If you don’t have any credit cards or loans, you might think you’re safe from credit score stress. However, having no credit score can be as troubling as a low credit score. Creditors want to see a history of responsible borrowing and repayment to consider a safe investment. If you do not have any score or history for them to look at, it makes you a risky investment. Creditors and lenders are aware of this. Some specifically target fresh and clueless graduates, so they can charge exorbitant annual rates or penalty fees when they inevitably make mistakes.

Unaware of Credit

If you’ve never applied for a credit card or a loan, then you would have no credit history.  Some people may think that a credit score doesn’t exist with their name on it. However, you aren’t required to have open lines of credit to get derogatory remarks from debtors. For example, outrageous medical bills, casino winnings, payday loans, unpaid accounts. Those collections accounts create a credit score for you without you actively applying for it.

Too Many Accounts

When checking out at a retail store, the clerk most likely offers their incredible store credit card. You’ll snag 15% off your purchase that day and receive a birthday gift in the mail each year, etc. These may seem innocuous, or they may even be confused for loyalty rewards cards. They are a line of credit all the same. Each new card brings a new hard credit check on your credit report. This shows the creditors assessed your credit history in detail to open up a new line of credit with them. While these are, of course, expected every once in a while. Unfortunately, too many hard checks will drive your score down as it appears to creditors that you are risky. It shows you are in desperate need of more credit access, even if that isn’t the case. Avoid applying to every store credit card and stick to your favorite place, or none at all.


One of the most significant factors in calculating your credit score is how much credit you are using. If you have a line of $10,000 in credit and you are using $5,000, you have a credit utilization of 50%. The more of your credit that you use, the more points you will lose. Ideally, you’d like that number to be no higher than 35%. Anything more than that, and your score will be taking a hit.

Going Over

Similar to the previous point but worthy of note is going over the limit on a credit card. Some credit cards don’t allow you to spend more than what’s left of your credit.  Some of the more predatory companies have no problem letting you make a purchase that puts you over your credit limit. Not only will you get penalties, but your credit will too.


You’ve made your final payment on that credit card and want to close down the account all together so that you don’t run up a balance like before. Don’t cancel that account! It may seem counterintuitive, but closing accounts actually hurts your score. Remember the utilization of credit? Let’s say that all your possible credit equals $20,000. You have used $5,000. That’s 25 percent of your credit utilized. Not bad. But let’s say you shut down a credit account with a line of $5,000. That means you are still using $5,000 but only out of a possible $15,000. You are now utilizing 33.33% of your possible credit, even though you haven’t spent a dime more. So before you close your accounts, you may want to make sure it’s in your best interest.

Not Checking Score

Checking your credit score continuously helps protect you from identity fraud. This helps catch fraud early and enables you to correct any errors on your account. You may very well discover a mystery account for a fast cash loan that your criminal-minded acquaintance had received using your name. They may find a medical bill that’s accounted to you instead of someone else. For these types of incidences, you can file disputes to get them removed, and your score restored.  It does pay to check and stay on top of your credit score.

Most people understand that a significant financial setback can severely impact your credit score. For example, a 30-day late payment will cost your score from 60-110 points, a foreclosure will take away 85-160 points. In addition, filing for bankruptcy will result in a loss of 130-240 points from your score.

So have you checked your credit score lately? Have you been guilty of any of the above infractions? We all make mistakes. And luckily, most of them will leave your credit report with 5-7 years. A tanked credit score is not the end of your financial world. There are steps we here at The Credit Care Company can provide credit scoring counseling and help you restore your credit score. We strive to improve your credit score by using various credit recovery solutions, including education, counseling, monitoring, disputes, and debt negotiations and settlements. Contact us to get started on cleaning up mistakes and achieving financial freedom.

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