By Dr. Kavita
I am sure that you decided to read this post, not because you want to really know tips to kill your credit score, but because you realize the importance of credit score to your finances. You know that higher your credit score, higher will be your chances at securing loans, credit cards with benefits, and so many other financial conveniences.
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But the reason I elected to elaborate on ways to kill your credit score is that many people are unknowingly or unwittingly killing their credit score with their own actions. Let us take a detailed look at the issue and learn from our mistakes. Let us learn about ways to kill credit score with an intention of steering clear away from those ways ever in our lives.
Closing out credit cards
Most of us do not realize how much damage this single action could create in terms of our credit scores. But on first impression, it seems counter intuitive to even suggest that closing out your unused credit cards can damage your credit score. The fact is that when you close out, the reports related to that credit card will fall off your credit report and that is not going to prove any credit worthiness to your lenders.
Instead if you choose to keep the credit cards, despite not using them, the reports connected to them will be shown in a positive manner and will have a good impact on your overall credit score.
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Defaulting on payments
This one is pretty simple to understand. No matter how small the outstanding bill is, if you defaulted on paying them, then it will leave a blemish on your credit score. You will be labeled as a high risk customer, one who is a highly risky person to trust your money with.
Overshooting your credit limits
Limits are meant to be stop people from overshooting them. If you have a constant tendency of maxing out your credit card or overshooting your limit, your credit score is in for trouble. A safe rule of thumb is to limit your credit card usage to 10% of your actual credit limit.
Too many credit card inquiries
When people become too desperate to get a credit card, the first blunder that they commit is to put in many applications with different credit card companies, thinking that if they apply for 10, they might get approval for 2. Well, your desperation is showing and getting reported back to the credit bureaus as well. This desperation is considered by the bureaus as a lack of credit worthiness and hence reflected negatively by pulling your credit scores further below.
Stop and think for a while if you have been committing any of these blunders and if the answer is yes, you now know that you were killing your credit score with your own hands!
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