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5 Things People Do That Hurt Their Credit Scores

Rebuilding your credit score could be a challenge to most consumers, but with the proper education combine with action your goals could be achieved. Once you get your score to the number you want, you want to protect it by not making careless financial mistakes. In this article, I will disclose the five things that will hurt your score that you have been trying so hard to improve.


1. To many Inquiries and lying on a loan application

Be careful not to get too many credit card inquires because it could drop your score. The banks don't like to see that you have applied for credit all around the town. If you are applying for a car loan or a mortgage within 45 days, it will count as one inquiry. Soft inquires won't hurt your score, but hard ones will. Be careful when you search online comparing car quotes because some credit bureaus may count the inquiries against you.


Don't lie to improve your score for the following reasons: First, banks can check your correct score with no problem. And second, it's fraud if you misrepresent information on a credit card application.


2. Lack of budgeting and savings

Lack of budgeting is a major factor in why people have a bad score. Spend time formulating a weekly and monthly budget. It will allow you to spend less than you earn and put extra money away toward paying off your debt.


Try to save each month for emergencies. By saving, you will avoid over-extending your credit cards, which can bring your score down. Start out with saving 5% of your income every month and then go to 10%. You can have your bank take the money out every month and have it transferred to your savings.


3. No emergency funds or insurance

Emergencies such as losing your job, a medical crisis, or a death in the family can often be an unexpected financial strain, if you're unprepared. You must have money in place to maintain your bills, or your three digit number could take a hit because all of your available money will go toward your emergency.


Get life insurance, health insurance, disability insurance, and car insurance. If you have an emergency in any of these areas and you don't have proper coverage, you can find yourself in serious debt and with a damaged your three digit number.


4. Not protecting your credit during a divorce

If you are married and you and your spouse decide to get a divorce, joint accounts can bring your three digit number down if one of you does not pay the bill. Even if you've gone to court and have legally decided who will be responsible for each bill, the only thing that matters to your creditors is that one of you send your payment on time. According to the lenders, both parties are liable for the debt.


5. Closing old credit cards.

Closing old credit cards will hurt your credit score in two ways. First, when you close an old card, it will reduce the over length of your credit history which will in return lower your credit score. Second, closure will lower the amount of high credit you have between all of your credit accounts.


Now that you are aware of the five things that can lower your three digit number, go out there and take action to prevent your three digit number from taking a hit.

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