Maintaining your credit score is tough work, or at least it sure seems like it. If you are careful about your credit card use, then odds are you have a pretty good idea of what can hurt your credit score and what can help it, such as paying all your credit card bills on time and keeping your balance low.
But you’d be surprised at some of the things that can hurt your credit score that you’ve probably never given a thought to. Be aware of the following things that can actually damage your credit rating:
Applying for a Credit Card
You may think that applying for a credit card and being rejected for it can hurt your score. However, simply applying for the credit card can hurt your score as well. This is because every time that you apply for a credit card, a hard inquiry will be placed on your credit file. Being rejected for a credit card doesn’t actually appear on your credit score, only the fact that you applied for it does.
Overdue Library Books
Small fines from overdue books can be easy to forget about. It’s a library after all, what could they possibly do about it? Well, they can actually send your bill to a collections agency, which will definitely hurt your credit score. This means that the fine for your overdue book can actually hurt your score as much as medical bills and credit card charge offs.
Getting divorced is stressful as it is. However, don’t think that just because your ex-spouse takes over the mortgage payments when the assets and debts are split up that you no longer have to worry about it. The account will still affect you and your score. For example, if your ex-spouse ends up declaring bankruptcy, creditors will hold you liable for any balances remaining on what was once a joint account.
Closing a Credit Card Account
There are many individuals who think that closing extra accounts that they don’t need is a good idea. The reason they think this varies. Some think that it will help prevent them from adding unneeded debts to their card. Others think that the less credit they are using, the less credit-dependent they will appear to be, thereby improving their credit score. This is not true.
First of all, using less credit does not help your credit score. Having more credit does. Closing an account can actually raise your utilization percentage, which will hurt your credit score. Also, any positive credit history that was associated to the card of the account that you closed will be lost.
Disputing an Account
Whenever you do your annual credit check to make sure there are no errors on your account and you find such an error, disputing it can actually hurt your credit score. There are a number of things that you can dispute, whether a wrong account showed up or a payment is marked as late even though you contend that it was on time. The problem is that disputing it won’t remove it from your credit report, but it can negatively affect your score.
Owning a credit card takes a lot of responsibility. There are plenty of ways that you can hurt your credit score, so be very careful. These are just a few of the ways that you may not be aware of. Other things that can hurt your score include late payments, non payments, high utilization percentages and more. Be careful about your spending habits and pay all of your bills and fees on time and you should retain a positive credit score.
This is a guest post. Chase Sagum is the author of this article. You can see more of his articles at www.lexingtonlaw.com.
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