What Can Ruin Your Credit Score
Your credit score matters whether if its renting or buying! A lot of times you may not know why your credit score is so low, there are many other reasons as to why your credit score is bad aside from forgetting to pay your bills on time.
What to avoid to maintain good credit
- Too many inquiries
For example, when you’re looking to buy a car or request any type of quote on a loan or interest rate, lenders pull a hard inquiry that shows up on your credit report, and majority of these inquiries will not disappear until 2-4 years! A lot of people don’t know is that if you’re comparing loans for like a car, inquire your quotes in a short period of time (during 14-day period) because it won’t hurt your credit as much. Rather than doing over a long period of time it will show up individually on your credit report.
- Using too much of your credit
Even if you use your credit card every day and are still able to pay your balances in full on time each month, it’s still not good for your credit score. Even if you’re paying it off (which is the right thing to do), it’s not recommended to max out your credit. Just because you have let’s say, $2,000 line of credit its ideal for you to only use 10-15% of that credit, usually if you go above 15% it will hurt your credit utilization ratio. It’s best to keep your balances low on your lines of credit!
- Not using credit at all
This may sound dumb to most people, but not using it at all can ruin credit too. Because not using it at all means no credit history. With no credit history, there’s nothing to show that you’re responsible of managing accounts and payments. When it comes down to it, it’ll be even harder to buy a car, home or rent something with no credit. Also, having accounts and not using it for a long period of time can result to the account(s) being closed which can hurt your credit as well.