10 Things that will destroy your credit score

It’s not too difficult to keep your credit score at an above average level by paying attention to a few key factors, but if you make some mistakes and let your score fall it can be incredibly difficult to get it back to a respectable level.  If you do your best to avoid the circumstances I’ll describe here then you’ll have a better chance of maintaining a good score.

Number one – being late on your payments.  It looks really bad to creditors if you show that you consistently can’t manage to make your payments on time, or at all.  No one is going to want to extend you credit if you can’t show that you are capable of making the payments.

Number two – filing a bankruptcy.  Things happen to all of us; no health insurance plus an unfortunate accident can equal extremely high bills that you can’t afford to pay, but know this before you file:  a bankruptcy can negatively affect your credit score for up to seven long years.

Number three – having a debt go into collection.  Even worse than being a little late on your payments is having them go into collection.  Usually if you are past due beyond 120 – 180 days your debt will be sent into collection.  This tells creditors that you aren’t even making the effort to pay the bill, or that you don’t have any intention of paying the bill.

Number four – not paying a debt at all.  Even worse than letting a debt go into collection before getting your stuff together and paying it is not bothering to pay it at all.  If a credit card company needs to write off your debt as a loss because you didn’t pay it, you are putting your credit score in serious jeopardy.

Number five – having to settle on a debt.  If you get in so deep into a debt situation with a credit card that you can’t possible afford to pay it all and are forced into settling with the company for a lesser amount, you can expect your credit score to take a hit.

Number six – maxing out your credit cards.  If you’ve got five credit cards and have spent up to your limit on all of them, your credit score will suffer because of it.

Number seven – not paying at least the monthly minimum payment.  Some lenders will allow you to negotiate down what you are paying toward your card, but if you can’t even manage to scrape together enough to cover the minimum monthly payment, that could spell trouble for your credit rating.

Number eight – going into foreclosure.  Defaulting on your home loan and having your property go into foreclosure will have a serious effect on your credit score.

Number nine – having your property repossessed.  Much like going into foreclosure on your property, being paid a visit by the repo-man and having property that has gone unpaid for taken back will do serious damage to your credit.

Last but not least, number ten – applying for or opening several lines of credit at once.  Multiple inquiries on your credit from different lenders at the same time can also work against your credit score.

There are some circumstances that occur that are out of your control that can do serious damage to your credit score, there isn’t any reason that you should let your credit score plummet because of things that you can control.  If you take heed to keep out of the situations described above than you have done all you can to keep your credit score where you want it to be.