Ways to Lower your Credit Score

Do you know what your credit score is? Your credit score is a measuring tool to see how reliable you are when it comes to repaying loans. The higher your score, the better terms you can ask for when it comes to getting a loan. The lower your score is, the less leverage you have with the credit card companies and other creditors. What are some ways you can actually lower your score and hurt your credit?

The first way to lower your credit score is to not make a payment. If you are late more than 30 days on a payment, you will have your credit score lowered. If you are late by 60 days, your score will be lowered again. This will continue every 30 days until you get around to making that payment on time. When you have multiple late bills, you should pay the one that is the latest, so you can catch up on your payments.

Another great way to lower your score is to apply for a lot of cards, or loans. Each time you apply for a loan, you are going to have your credit checked. Each time you have your credit checked, your score is temporarily lowered. This means that you should not apply for new credit lines before applying for a house or any other big purchases. 

Using too much credit will lower your credit score. There is a factor called your debt utilization that is taken into account to determine your score. If you are using more than 10 percent of available credit, your score could be lowered. Lenders like to see that you don’t have to use all your credit to survive. It makes it more likely you would pay back a loan should you be offered one.

Closing a credit card could hurt your score because it could lower your line of available credit. Along this same line, having a small credit history can affect your score. If you are eliminating credit access, or don’t have a reliable reputation yet, you are saying that you either don’t know how to, or don’t have experience using credit. This can be a major red flag for creditors.

Your credit score is something that you should never take lightly. If you are looking for a loan, this is going to be something that lenders will look at closely, so make sure your score is as high as possible.