5 Ways Your Credit Score May Be Affected Without You Realizing It
Your credit score is one of the most important factors in determining your financial future. Check out this article to learn 5 things that may be hurting your credit score without you realizing it!
What Are The Five Ways Your Credit Score May Be Affected Without You Realizing It?
- A change in your payment history can affect your credit score.
- If you have multiple accounts with the same lender, that lender may factor that information into your credit score.
- Your credit utilization rate can impact your score as well.
- A disputed debt or a bankruptcy filing can both negatively affect your credit score.
- A low credit score could also be a result of factors outside of your control, like a high interest rate on your loan or a lack of available credit due to bad credit history
The exact effect each of these things will have on your credit score.
Your credit score is a number that lenders use to determine your eligibility for a loan and the interest rate you’ll be charged. A high credit score means you’re a low-risk borrower, which can lead to lower borrowing costs.
Here Are Six Things That Can Affect Your Credit Score Without You Realizing It:
Filing Your Income Taxes Late
If you don’t file your taxes on time, this can negatively affect your credit score because it shows that you’re not meeting your financial obligations. The more recent the tax return, the better.
Paying Your Bills Late
It’s important to pay all of your bills on time so your credit rating stays good. If you miss one payment, your credit card company may report this to the three major credit bureaus – TransUnion, Equifax and Experian – which will impact your credit score.
Having Too Many Credit Card Balance Owed On One Account
Having too many balances on one account can damage your credit rating because it shows that you’re not able to handle debt responsibly. Try to have no more than 30% of each account’s total balance owed to cards with high APR rates (more than 24%). This will help improve your overall debt-to-credit rating ratio.
4. Missing Payments On Auto Loans and Student Loans
If you go more than 60 days without making a payment on an auto loan or student loan, this will also negatively impact your credit score because
How To Keep Your Credit Score High.
Your credit score is an important indicator of your financial well-being. If you have a good credit score, it means that you are able to borrow money and pay back debts on time. A low credit score can mean you may be unable to get a loan or a mortgage, or may pay more for goods and services.
There are many things you can do to keep your credit score high:
Keep updated on your account status and payments: Make sure you keep track of all your account information, including the amount of debt on each account, current payment history, and any outstanding balances. This will help improve your repayment habits and help increase your credit score.
Make sure you keep track of all your account information, including the amount of debt on each account, current payment history, and any outstanding balances. This will help improve your repayment habits and help increase your credit score. Pay off high-interest debts first: If you have lots of high-interest debt such as student loans or auto loans, try to pay them off first to reduce the amount of interest owed and improve your overall credit score.
If you have lots of high-interest debt such as student loans or auto loans, try to pay them off first to reduce the amount of interest owed and improve your overall credit score. Keep up with monthly payments: If you miss a single monthly payment, it can affect your overall credit rating. Try to make all required payments on time so that lenders see a
Common Mistakes That Can Damage Your Credit Scores.
Your credit score is a representation of your creditworthiness, and can impact your ability to get loans, insurance, and other types of financing. Here are some common mistakes that can damage your credit score:
1- Failing to keep up with payments on eligible debts: If you have any eligible obligations such as mortgages, car loans, student loans, or other loans that are 30 days or more past due, this can negatively affect your credit score. Your debt-to-income ratio will also be calculated based on these past due amounts, so it’s important to stay current on all bills if you want to maintain a good credit score.
2-Not using authorized credit cards responsibly: Credit card companies typically review your usage patterns and rate you accordingly. If you consistently use your cards for large purchases (more than $600 in a 12-month period), this could lead to a lowered limit or loss of privileges on future cards. Additionally, if you carry high balances on your cards (more than 30% of the account total), this could also lead to a decrease in your credit score.
3-Failing to report changes in repayment status: When you make a change in repayment plan – such as cancelling an installment agreement – you’re responsible for notifying the creditor within 30 days. This information can help creditors update their records and potentially improve your credit score over time.
4-Lending money to friends or family members.