Four Surprising Things That Damage Your Credit
Hey Financially Savvy Sister
We all know that paying our bills late can damage our credit score. And most of us know that having too much debt is a challenge, too. However, there are some things that seem harmless that can also put a damper on your credit as well.
Here are some surprising things that damage your credit:
- Getting the wrong type of credit. Obtaining your financing from the source of your purchase is generally frowned upon. Furniture stores, car dealerships, and more are common sources of this ‘second class’ credit. They’re viewed as credit for those that don’t have options.
- Your utilization ratio is too high. A significant portion of your credit score is determined by how much of your available credit you’re using. For example, if your credit card has a credit limit of $2,000 and your balance is $500, then you’re utilizing 25% of your credit on that account.
- Hard inquiries. In the world of credit, there are hard inquiries and soft inquiries. Hard inquiries lower your score for a time, while soft inquiries don’t affect it at all.
- Not using any credit. Perhaps you feel that you’re being financially intelligent if you swear off credit altogether. However, even if you keep your credit cards, if you never use them at all, you’re hurting your credit score. You need to have some sort of payment history.
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Your credit is worth keeping in mind. So many things are more expensive when your credit is poor. In fact, many things are entirely out of reach if you have a low credit score. Remember the surprising things in this article that can damage your credit and make an effort to avoid doing any of them. Your financial future depends on it!
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