Destroying Your Credit Rating is Easier than You Think
It is one of the most important numbers in life, and it is incredibly easy to destroy. Your credit rating tells businesses a lot about you, and you could be destroying it without even knowing it. There are things that you might be doing that are causing your credit rating to get a big hit, and unless you change your behavior, your rating will continue to decline.
The Danger of the In Store Credit Card
It happens almost any time a consumer goes shopping. When they get to the register, there is that appealing offer for a discount if they only sign up for the store credit card. They like the idea of getting a discount, so they do it. And then they do it again, and again and again.
What ends up happening is they begin to be viewed as a credit risk, even if they pay off the cards. Their credit rating will take a hit because they have opened up too many accounts in a short period of time. Saving a small percentage off of one purchase is not worth the impact a large amount of accounts has on a credit rating.
Closing Credit Cards
Another mistake that people make is that they close their credit cards. A big part of your credit rating has to do with your credit history. The length of history factors into your credit score, and if you close cards, you are hurting that aspect of your score.
Keep your cards open and be wary of jumping from card to card in order to get a lower interest rate. Your credit rating is improved with loyalty. Stay loyal to the cards that you have, and do not open new ones unless necessary.
High Balances
A high credit card balance is another sure killer of a credit rating. Many people rely on their credit cards to get them out of jams that occur. However, do your best to only use up to 35% of the card limit. Anything above that will start to negatively impact your credit rating.
Unfortunately, it is much easier to lower your credit rating than it is to raise it. However, you can obtain a good credit rating if you work to eliminate mistakes that you might be making. Do your best to stay on top of your credit so you will be able to maintain a score that will help you in the future.
