You have probably read a lot about what you can do to help your credit score recover, but here are five ways to kill your once stellar score.
Forget to put the check in the mail. You’re on vacation now, laying on the deck of your yacht when you suddenly remember you forgot to put the American Express payment in the mail. You could do nothing, and forget about it until our back from vacation. On the other hand, many companies forgive a onetime blunder as long as you bring your account current in a reasonable time. You just may have dodged that thirty day late bullet by making a five minute phone call.
Spend up to your credit limit. It seems this is getting less and less popular as time goes by. Now card companies are recommending you spend only ten percent of your limit, and thirty max. That’s a long way from the fifty percent we were once told. The measure of debt to your credit card limits accounts for thirty percent of your credit score.
Got any credit cards you are not using much anymore? Go ahead and throw those out; NOT. Length of time accounts for fifteen percent of your credit score so you would do well to keep those cards you have had forever and use those rather than getting new cards.
Get a better card, then a better one and then a really great one. There are a multitude of new cards out there competing for space in your wallet but it is better to stick with the ones already in there. Lenders are a jealous breed and check to see if you have been out and about, applying for new cards. That will account for ten percent of your score. Just don’t do it.
Want to boost your score? Borrow more money, get more cards, and open other kinds of accounts. Well first of all, never borrow just to make your score better, and don’t believe anyone who tells you you have to keep a balance on a card to reap the benefits. Whenever you apply for credit you will notice your score take a hit. Having a number of different types of debt can be a good thing though. Those with stellar credit are ones who have proven they can manage different kinds of debt, like car loans, mortgage payment, and credit cards.
There you have it, a brief overview regarding your credit, what not to do and what to do. There are much more to it than this but it’s a good place to start.
Good luck and happy borrow ring.
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