| It wasn’t that long ago when even those barely | | | | responsible credit management It will only see that you |
| earning above the poverty level were courted by | | | | are constantly carrying a large balance. |
| lavish offers by the credit card companies. In | | | | Apply for New Credit Too Often |
| today’s credit market, even the smallest blemish on | | | | New credit accounts lower the average age of your |
| your credit report may result in a bold ‘not | | | | credit history; and as stated above, a lengthy credit |
| approved’ stamp planted in the middle of your loan | | | | history is a positive attribute of a healthy credit score. |
| or credit application. These days, destroying your ability | | | | Every time you apply for a credit card, a hard inquiry is |
| to get credit is about as easy as blowing out a | | | | posted on your credit report as opposed to a soft |
| birthday cake full of candles. | | | | inquiry which is posted when you request a copy of |
| Closing Unused Credit Accounts | | | | your report. Hard inquiries in themselves are not the |
| A sure way to see your credit score drop is by | | | | problem; it’s multiple inquiries in a short period of |
| closing your available credit accounts. You may think | | | | time that is a concern to creditors – giving the |
| you’re cleaning after accounts that are just | | | | appearance of desperation or other troubles. |
| wasting away. But, when you close an account, your | | | | This is not to say that you shouldn’t be a smart |
| total amount of available credit drops – a bad sign | | | | shopper. Responsible consumers will consider several |
| to credit reporting agencies that has a negative impact | | | | offers before buying a car or signing for mortgage. |
| on the algorithms they use to calculate credit scores. | | | | Your credit score will not be impacted within a 45-day |
| Part of your score is calculated by measuring the | | | | window while you have auto lenders and mortgage |
| amount of debt against the credit limit. If your debt | | | | companies inquire about your credit report. |
| levels remain the same, lowering your available credit | | | | Renege on Debt Responsibilities |
| by closing active accounts will throw the ratio of debt | | | | Perhaps the easiest way to destroy your credit is by |
| to available credit off kilter. If you have only a few, low | | | | skipping out on debt you owe. Paying late or not at all |
| balance accounts, closing one can lower your score | | | | will ensure that your credit score drops like a rock. |
| considerably. | | | | How recently the late payment was made, how late |
| The only time it is advisable to close an account is | | | | and the frequency of late payments effect how much |
| when an annual fee applies on an account that you no | | | | damage will be incurred. |
| longer use. Furthermore, only recently opened | | | | Ignoring an overdue book fine at the library may hurt |
| accounts should be considered for closing. Length of | | | | more than losing your book-borrowing privileges. It |
| credit history is an important component of the credit | | | | actually can negatively impact your credit score, as |
| score. One expert suggests that the ideal credit | | | | can other seemingly meaningless hassles, such as |
| customer has 20 years or more of credit experience. | | | | parking tickets. Many of your daily transactions are not |
| Credit Cards Left to Collect DustEven if you don’t | | | | reported to the credit reporting agencies, but these |
| personally close any credit accounts, your credit card | | | | same businesses may send your past due account to |
| company may close them for you. Accounts that are | | | | collections, resulting in negative reports. |
| inactive or kept on the back burner for emergencies | | | | One example is the commonly held opinion that cell |
| may be seen as a potential risk factor. A creditor may | | | | phone accounts don’t affect your credit report. But |
| lower your credit limit or completely close the account. | | | | that’s just not the case. You may not see a |
| Also, if an open account is unused for a long enough | | | | positive report about paying your phone bill on time, but |
| period of time, the company can stop reporting it to | | | | renege on paying that bill and it will eventually be sent |
| the credit bureaus, negating any possible contribution to | | | | to a collection agency who will report the past due |
| your credit score. | | | | debt. |
| The fact that the creditor took action to close the | | | | Ignore Credit Report Mistakes |
| account is also noted on your credit report. It would be | | | | Mistakes on your credit report need to be addressed |
| better if you’re not going to use an account to | | | | as soon as they are noticed. Many errors are easily |
| either close it to use their cards periodically. | | | | remedied and are simple errors of misreporting. Credit |
| Running Up High Ongoing BalancesEven more | | | | reporting bureaus are required to take action on any |
| negative attention is drawn when you use too much | | | | requests made that question an entry. |
| credit. Excellent credit scores are the result of lots of | | | | Building and maintaining an excellent credit history is |
| credit that is not used too much or too little, with low | | | | particularly important in a struggling economy. When |
| balances on several cards rather than one large | | | | lenders are lowering their approval numbers, a great |
| balance. For example, charging $6,000 one month and | | | | credit score will improve your chances to get the |
| paying it off followed by a charge of $10,000 the | | | | credit you need. |
| next and paying it off, will not be recognized | | | | |