10 Ways to Quickly Destroy Your Credit

Last Update: February 10, 2021 Credit Report

Building a solid credit reputation takes time and financial sense. Keeping good credit standing takes diligence. Ruining your credit is easier to do and can happen instantly after making certain financial mistakes. It can take years for your credit to improve. Here’s your guide on how to quickly destroy your credit.

Make Late Payments

The quickest way to destroy your credit is to make a late payment. Late payments are reported to the credit bureau when the payment is made more than 30 days after it is due. If you make a simple mistake and pay your bill 5 days late, it will not affect your credit score. A late payment stays on your credit report for 7 years and 180 days. Lenders can see how many late payments you’ve made and how recently you’ve made them. One late payment can immediately drop your score by over 100 points.

Apply for a Credit Card at Every Store in The Mall

One Saturday afternoon of shopping in the mall can hurt your credit report. Every store you walk into will offer you a “great” deal to receive a percentage off your purchase if you apply for their store credit card. Don’t fall for the marketing ploy. While it isn’t wrong to have a few store credit cards, you shouldn’t open one for every store. Applying for several cards at once will put several credit inquiries on your report, which will drop your score, and it doesn’t look good to lenders.

Forget to Pay Your $20 Copay at The Dentist

If you forget to make a small payment to your doctor, dentist, or really any bill, it may end up in a collection account. Collections on your credit report make your credit score take a plunge. Don’t let small bills get lost in the piles of mail. Pay everything, and on time, even a $20 outstanding bill that was a slip of the mind can cost you over one hundred points on your credit report.

Mix Out Your Credit Cards

One of the factors attributing to your credit score is your credit utilization ratio. If all of your credit cards are maxed out, it will hurt your credit report. It is suggested to keep revolving trade lines below 50% of the available balance.

Have a High Amount of Revolving Debt

Revolving debt comes from a line of credit that is not secured by collateral. The most common type of revolving debt is credit cards. A large amount of revolving debt is an indicator of overspending and cash flow problems. High revolving debt balances will drive your score down.

Only Keeping One Type of Credit Trade Line

The FICO credit report agency analyzes the diversification of creditors on your report. If you only have one type of debt, such as only car loans, only credit cards, or just a mortgage, this will drive your score down. Credit diversification does not impact your score as much as other factors do, but it is still something to consider while establishing a strong credit rating.

Close a Bunch of Credit Cards at Once

Many people pay off their credit cards and close them to remove the temptation of charging them up again. While their theory is to protect themselves financially, they are actually sabotaging their credit report. Closing all of those cards at once makes a significant impact on your credit utilization ratio. You eliminate all of the available cards and make the overall trade lines significantly lower. This will make your score drop.

Falling Behind on Taxes

Taxes may seem like they aren’t related to your credit report at all, but they can end up making a difference. Taxes will not have any effect on your credit report if you pay them on time every year. However, if you fall behind on your taxes, you can have liens placed on your property or wages. All liens and judgments are reported to the credit bureaus and have a significant negative impact on your credit score.

Mortgage Loan Delinquencies

We’ve come a long way from the great recession and the housing collapse of 2008. However, many homeowners are still defaulting on their mortgages. Any mortgage loan delinquencies quickly harm your credit reputation. If you are going through a short sale or a loan modification, you will have months of delinquencies. Each month a late payment is reported, your credit score will drop lower. Additionally, a foreclosure will severely hurt your credit image and remain on your credit report for seven years.

Co-Sign on Someone Else Loan

Cosigning a loan does not seem like a big deal when you do it, but it can have some large ramifications. You co-sign because you trust the person who is trying to get the loan. You know that they have a good job, and they seem to have things together. Looks can be deceiving, and you really can’t understand someone’s financial health based on appearances. The worst part about co-signing is when the original borrower doesn’t tell you when they are struggling to make their payments. A few months of late payments can pass before the lender contacts you looking for money. At that point, you already have delinquencies reporting to your credit, making your score plummet.

Keeping a healthy credit score does not have to be a challenge. Avoid the situations above, and you will have a strong credit rating and have access to all of the loan products you need.



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