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3 Things You Didn't Know Could Hurt Your Credit Score

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Carrie SmithGuest Blogger
June 09, 2016 · 5.3k Views

A good credit score can open up great opportunities for you, in both your finances and career. With a good history of credit you could qualify for lower interest rates, helping you pay off your debts faster, or land a better-paying job since employers sometimes take your credit score into consideration before hiring.

However, just like there’s a positive side to what impacts your credit score, there’s also a few things that can negatively hurt your credit rating. Here are three things you didn’t know that can hurt your credit score.


1. Closing zero balance credit card accounts

Just because you have old credit card accounts that are never used, doesn’t mean you should cancel them. Keep the credit card accounts open since they contribute to your overall credit limit utilization and your entire history of credit.

To fully optimize your credit rating, it’s best to keep your credit card limit utilization to less than 30% between all your credit card balances. Closing out an account would change that percentage and possibly put you over this percentage limit, hurting your credit score.

If your zero balance credit cards are some of the first cards you ever applied for, they are the ones that establish your long-time use of credit history. Closing these old accounts could negatively impact your credit rating for the long-term.

2. Not checking your credit report regularly

Don’t ignore your credit report, because doing so could cause you to miss red flags related to fraud or identity theft. The United States government has made it accessible for everyone to check their credit report for free every year, by going to AnnualCreditReport.com.

Review your credit report for potential errors, mistakes related to your name or address as well as any other credit or account activity. It’s better to spend a few minutes checking your credit report every quarter, or every year, than to have to file a fraudulent claim, or spend years trying to repair the damage that someone else did to your credit report.

3. Being unemployed for too long

Unemployment claims do not hurt our credit score, but being unemployed for too long can affect your ability to pay your bills on time. Missing even just one bill payment by more than 30 days can cause your credit score to suffer.

And it’s not just late payments on credit cards that can negatively affect your credit. Late payments on utility bills, cell phone plans, medical bills and even parking tickets, can hurt your credit rating. If you’re having trouble finding employment, talk to your creditors about delaying payment, or try to find an alternative route to cover your payments.

Whenever possible, pay all of your bills on time as even one missed payment can cause your credit score to plummet. Set up a regular routine of checking your credit report for omissions or errors and don’t close any major accounts without doing some research first.

Combining all of these steps will help you improve your credit score over time, which can help you build more wealth for the future.


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Hi, I'm Carrie Smith! I'm a financial writer and small business expert who helps freelancers build client-based businesses through meaningful relationships. I have a background in small business accounting and taxes and recently won an award for Best Entrepreneurship Blog for my site, carefulcents.com.

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