Are you hurting your credit score?  Perhaps you may say that you will not do anything to hurt your own credit but is that really true?  Many consumers are not aware that they are inflicting damage to their credit scores with how they handle credit.  On this post, let’s discuss negative things that you might be guilty of and can badly affect your credit score:

Do not max out your credit card.  Did you know that maxing out your credit limit can deduct anywhere from 10 points to 45 points from your credit score, depending on your current rating?  Credit utilization makes up 30% of the FICO score so this is not a surprising fact.

If you would like to maintain a score of at least 720 and above, you should be very careful with how you use your credit limit.  Experts recommend keeping credit usage minimal, as much as possible below 40% of your available limit.

Don’t be late.  This may be an obvious tip but many people are still guilty of late payment.  Missing your due date can slash off anywhere from 60 to more than 100 points from your credit score.  The highest percentage in the FICO scoring system is payment history at 35%.  Just imagine how much you will be hurting your credit score if you fail to pay a bill on time.       This is true not just for credit card and loan payments but for all types of debts (electricity, cable, internet, etc).

Cancelling a credit card.  You might be thinking about cancelling one of your credit cards because it has a high rate or because you already have new credit cards.  Before you pick up that phone and request to cancel, you should be aware that your credit score can suffer.

If it’s an old credit card you’ve been using for years, closing it now would mean erasing the old parts of your credit history.  The length of credit history takes up 10% of your FICO score so you could be penalized for losing those precious account activities.  Instead of cancelling, consider keeping the card, using it only for a small purchase.  Be sure to pay it off in full right away so you won’t need to pay the interest rate.

Not having a variation of credit accounts.  If you only have credit cards in your name, it would be hard to boost your score.  Types of credit used makes up 15% of your overall credit score so it is recommended to acquire different types of accounts in your name.  Of course, timely payment for each account is crucial to maintain excellent credit.

Seeking debt settlement as a solution.  Resolving a debt problem through settlement can be an option but you should be aware that such a move will damage your personal credit score.  If you have higher score, you could lose up to 125 points if you settle.  Thus, before taking a step forward, weigh the matter carefully and see if the advantages of debt settlement far outweigh the damage it can do to your credit score

Allison May

Allison May is a credit consultant and a writer for Credit Creators. The resource provides consumers with valuable advice and information on Guaranteed Approval credit cards, Unsecured credit cards for Bad Credit and other credit-related issues. The main objective here is to help people build good credit.