What hurts a credit score?

Highlights: Even one late payment can cause credit scores to drop. Carrying high balances may also impact credit scores. Closing a credit card account may impact your debt to credit utilization ratio.

equifax.com - Five Things That May Hurt Your Credit Scores | Equifax®

What happens every 50 years in the Bible?

The Jubilee year – occurring after every seventh Sabbath year, thus, every 50 years – is an economic, cultural, environmental and communal reset,...

Last updated Mar 31, 2019

What does Om do to brain?

Much like the sounds of nature, it appears that when you chant "Om," you stimulate areas of your brain that are associated with calm. At the same...

Last updated Jun 30, 2018

Awaken your dormant DNA ability to attract wealth effortlessly

The simple yet scientifically proven Wealth DNA method laid out in the report allows you to effortlessly start attracting the wealth and abundance you deserve.

Learn More »

Promotion

Highlights:

Even one late payment can cause credit scores to drop

Carrying high balances may also impact credit scores

Closing a credit card account may impact your debt to credit utilization ratio If you’ve tried to make a large purchase such as a home or a vehicle, or even open a credit card account, you likely know the important role your credit scores play in lending decisions. When you apply for credit, your credit scores and the information in your credit reports, along with other criteria, are used by lenders and creditors as part of their decision-making process when evaluating your application. It might be easier than you think to negatively impact your credit scores. Here are five ways that could happen:

1. Making a late payment

Your payment history on loan and credit accounts can play a prominent role in calculating credit scores; depending on the scoring model used, even one late payment on a credit card account or loan can result in a decrease. In addition, late payments remain on your Equifax credit report for seven years. It’s always best to pay your bills on time, every time.

2. Having a high debt to credit utilization ratio

Your debt to credit utilization ratio is another factor used to calculate your credit scores. That ratio is how much of your available credit you’re using compared to the total amount available to you. Lenders and creditors generally prefer to see a lower debt to credit ratio (below 30 percent). Opening new accounts solely to reduce your debt to credit ratio generally isn’t a good idea. That may impact your credit scores in two ways: the hard inquiries resulting from those applications (more about hard inquiries below), and the new accounts themselves may lower the average age of your credit accounts. It's best to only apply for the credit you need, when you need it.

3. Applying for a lot of credit at once

When a lender or creditor accesses your credit reports in response to an application for credit, it results in a “hard inquiry.” Hard inquiries can impact credit scores. Applying for multiple credit accounts in a short time may impact credit scores and cause lenders to view you as a higher-risk borrower. In addition, some credit scoring models may take your recent credit activity into account. There’s one caveat: if you are shopping for an auto or mortgage loan or a new utility provider, the multiple inquiries for that purpose are generally counted as one inquiry for a given period of time (typically 14 to 45 days, although it may vary depending on the credit scoring model). This allows you to check different lenders and find out the best loan terms for you. It’s important to know that this exception generally doesn’t apply to other types of loans, such as credit cards.

4. Closing a credit card account

What is the color of happiness?

Yellow Yellow is usually the color of happy, joyful emotions.

Last updated Oct 4, 2020

What color wallet brings in money?

Black Black is a very popular color for wallets and luckily, this symbolizes prosperity and wealth. If you are looking to advance your career or...

Last updated Aug 8, 2020

Awaken your dormant DNA ability to attract wealth effortlessly

The simple yet scientifically proven Wealth DNA method laid out in the report allows you to effortlessly start attracting the wealth and abundance you deserve.

Learn More »

Promotion

It may be tempting to close a credit card account that’s paid in full, but doing so may affect credit scores. Besides impacting your debt to credit utilization ratio, closing the credit card account may also affect the mix of credit accounts on your credit reports. In general, lenders and creditors like to see that you’ve been able to properly handle different types of credit accounts over a period of time. Closing a credit card account you’ve had for a while could also shorten the length of your credit history, which may impact credit scores.

5. Stopping your credit-related activities for an extended period

If you haven't used your credit accounts for months, and your lenders and creditors have reported no new information to credit bureaus, it may make it more difficult for lenders and creditors to evaluate your application for credit or services. Also, after a certain period of time, which varies depending on the lender or creditor’s policies, your credit card account may be considered “inactive” and closed by the lender. That, in turn, may impact credit scores in the same ways as if you had closed the account. If you want to keep the account active, you may want to consider using it – responsibly – every few months, if only for small purchases, or putting a small recurring charge on the card. Regularly checking your credit reports is one way to keep track of your credit accounts and know what information is being reported by your lenders and creditors – and factored into your credit scores. You’re entitled to a free copy of your credit reports every 12 months from each of the three nationwide credit bureaus by visiting www.annualcreditreport.com. You can also create a myEquifax account to get six free Equifax credit reports each year. In addition, you can click “Get my free credit score” on your myEquifax dashboard to enroll in Equifax Core Credit™ for a free monthly Equifax credit report and a free monthly VantageScore® 3.0 credit score, based on Equifax data. A VantageScore is one of many types of credit scores.

equifax.com - Five Things That May Hurt Your Credit Scores | Equifax®

Do you have to report inheritance money to IRS?

Inheritances are not considered income for federal tax purposes, whether you inherit cash, investments or property. However, any subsequent...

Last updated Jan 13, 2022

Which 1943 steel penny is worth the most?

There are also some significant varieties among the 1943 steel cents, including the 1943-D/D repunched mintmark. This widely collected variety is...

Last updated Oct 18, 2020

Awaken your dormant DNA ability to attract wealth effortlessly

The simple yet scientifically proven Wealth DNA method laid out in the report allows you to effortlessly start attracting the wealth and abundance you deserve.

Learn More »

Promotion

Who is the God of knowledge?

Athena is the Greek goddess of wisdom, intelligence, war, crafts, and knowledge. Her famed Parthenon was constructed in her honor. She was regarded...

Last updated Mar 7, 2022

Awaken your dormant DNA ability to attract wealth effortlessly

The simple yet scientifically proven Wealth DNA method laid out in the report allows you to effortlessly start attracting the wealth and abundance you deserve.

Learn More »

Promotion

How do you pray for a financial miracle?

God's desire is that you prosper and lack nothing. Say Thank You Lord that Abraham's blessing is working in my finances that I owe no man nothing...

Last updated Jun 2, 2019