5 factors that negatively affect your credit score

There are a lot of financial mistakes that could sabotage your credit score. But some do much more harm than others. Five errors in particular, are so serious that they could be called credit score killers. To protect your credit capacity you need to be aware of what they are to evade.

1- Late payments

It is the public enemy number one of the credit score. Delaying the payment of your obligations destroys your credit score because the credit rating companies put more shares in the performance of your bill payment than any other financial behavior.

In fact, default or late payments do more damage to your credit score than several of the other culprits on this list combined. That’s important because your credit score, in the first place, tells lenders if you can be trusted with credit. If you are not paying your bills on time or if you have omitted payments completely, your credit score will be adversely affected. So it is crucial and fundamental to pay your bills on time.

2- Balances with too high amounts

This is not as important as your payment history but it weighs on an individual’s credit history. The execution of large amounts of debt is a red flag defined for lenders. They are very interested in knowing that you can handle the amount of money you want to borrow. Therefore, credit rating companies will penalize you if you borrow more money than you can comfortably pay.

It is definitely not a good idea to run large balances on your credit cards. That is a sure sign for lenders that you may not be able to handle any new credit. If you want a better credit score you need to keep your income debt in balance.

3- Lack of credit history

You cannot get a job without a resume that describes your work experience. In the same way, you need a credit resume that will illustrate your experience with credit. That’s what your credit history is, your credit resume. If you are an experienced borrower your credit history is important, and if you are a novice it is crucial. Of course, this leads to the proverbial dilemma: How to prove that you are credible with a limited credit history? One answer may be to take out a secured credit card and build your credit with it.

4- The excess of new credit

Loans for bad credit no guarantor of money come with a lot of responsibility and the lenders want to see that you handle your credit with care. If you are constantly opening new lines of credit your credit score will be adversely affected. You must resist most credit card offers, taking only those that are vital to your financial strategy. Try to avoid opening numerous store credit cards to take advantage of discounts at stores.

5- Having too limited credit

To obtain a high credit rating it is necessary to have a mix of different types of credit: credit cards, a car loan, a mortgage loan and even a quick loan are taken into account.

How many of these credit score killers are currently at liberty in their financial profile? Take action now to put them behind bars and you can quickly see how your credit score goes up.