4 Mistakes That can Hurt a Credit Score
How to Boost Your FICO Score wanted to share the four mistakes that can ‘hurt’ a credit score — be careful not to max out those credit cards. Potential lenders also care about how much a person is charging on their card, because the more they spend the less likely they will be able to repay the debt — this is where credit card utilization comes in.
A utilization rate is calculated by dividing total balances by total limits. It significantly impacts a credit score and advises to keep the utilization rate between 1 and 20 percent so it shows that person is using their credit, but not relying on it.
The number two credit score saver is making those payments on time — just one or two late payments can drastically effect a credit score.
A third step is to avoid applying for a lot of credit — racking up a bunch of hard inquiries makes a person look desperate for credit. While one or two hard inquiries a year should not affect a score by much, a lot of those inquiries can cause significant damage.
Finally, make sure to monitor your credit score — one in five consumers have errors on at least one credit report. Check your credit score and credit report for free at annualcreditreport.com to learn more about your credit report.
Tags: Applying For a Lot of Credit, Boost Your FICO Score, Check Your Credit Score, Credit Card Utilization, Hard Inquiries, Hurt a Credit Score, Late Payments, Learn More About Your Credit Report, Monitor Your Credit Score