One of the most important aspects of a person’s financial health is their credit score. But have you noticed that your credit score isn’t as good as you think it should be? Well, there are other ways to lower your score than just missing payments or having a lot of debt. Here are some ways you may be accidentally hurting your credit score.
Closing Old Credit Cards
A good chunk of your credit score, about 15 percent, concerns the length of your credit history. The longer your history, the better. So, if you close an old credit card, even if you don’t use it, you could hurt your score by making your history shorter. Keep old cards open even if you don’t use them if you can.
Maxing Out Credit Cards
One of the most damaging things you can do for your credit score is maxing out or going over-the-limit of one of your credit cards. This means that your credit utilization is 100 percent, which is something you always want to avoid.
Applying for Several Credit Cards or Loans
If you apply for too many credit cards or loans in a short period of time, your credit score is going to suffer from the numerous hard inquiries. Also, it gives lenders the impression you’re desperate. Both can hurt your credit score.
Using Only One Type of Credit
Having diversity in your credit is a good thing. Credit mix accounts for about 10 percent of your FICO score, so it’s good to have a mix of credit cards and loans, not just one or the other.
Credit Report Errors
Sometimes, credit reporting errors can damage your credit score and your ability to apply for a credit card or loan. Check your credit report regularly and dispute any errors so that you’re not being punished for something that’s not your fault.
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