5 Good Ways to Make Your Credit Score Plummet
In this plastic world of ours, there are plenty of ways to make your credit score go up or just remain stable. On the flip side, there are also plenty of ways to make it sink like a rock. Here are five things of what not to do.
1. That’s a Lot of Cards
Perhaps you already have a Visa card, a MasterCard, an American Express card, and a Discovery card. But why stop there when there are so many store credit cards out there? Wal-Mart, Best Buy, JCPenny, and Sears to name a few. Who cares if you only shop at those stores a few times out of the year...or maybe just Christmas? Opening a lot of credit cards will make your credit score take a dip. The more you open, the deeper it goes. Too many cards looks uncommitted, or like you have some chronic credit card obsession. Either way, it’s a sure method of lowering your score.
2. Pay Little, Pay Late
It doesn’t matter if you have 5 credit cards of 1 (though 5 will actually make it worse), by paying only the minimum and paying late every time, not only are you sticking yourself by paying more, but your credit score is losing altitude. You will appear lazy or unable to properly pay off your credit cards – it doesn’t matter what your real cause is. What does matter is that you owe money, and you aren’t very good at repaying it. Credit scores do not respond well to this sort of thing.
3. Don’t Pay At All
Why bother paying anything? Failure to pay any bills whatsoever is guaranteed way of running your credit score into the ground. Soon creditors will be at your door with demands and possibly lawyers demanding their money, and if you continue to avoid paying, you will be in a lot more trouble than your credit score already is.
4. Gotta Have It? Charge It!
As you continue to open cards, pay low, pay late, or not pay at all, or even if you do pay on time and only have a few cards, you can still damage your score by putting every single purchase you make on your card. The only legitimate reason you may have to do this is if you have a rewards card, are extremely responsible, and do not overspend. However, overspending by buying unnecessary items and allowing your balance to build up until your card is maxed out reflects poorly on your money management skills and will show in your credit score.
5. File for Bankruptcy
Bankruptcy is the mother of all credit score killers. While many credit mistakes and problems last for several years, bankruptcy will stick to your credit report and therefore your credit score like glue for at least ten years. Bankruptcy should only be chosen as a complete and utter last resort. People tend to think that bankruptcy will rid them of all their debt woes, when in fact; even after bankruptcy you may still find that you owe money. Failing to pay back this money will further worsen your credit score. Filing for bankruptcy is not the answer to all your problems and instead, may tarnish your credit score more.
Avoid these five major credit score destroyers, and you will enjoy seeing your credit score stay happy and healthy.