5 Counterintuitive Ways You Can Ruin Your Credit

Regarding your credit, you may think you know how to safeguard your FICO score – pay your bills on time and don’t overextend. However, some behaviors that seem harmless, or even helpful, could unexpectedly tank your score. Learning more about what these actions could be will help you keep your credit safe and avoid pitfalls.

Closing Old Credit Cards

Many people have old credit cards cluttering up desk drawers that are not really needed anymore. But before you close an old card you never use, understand that the length of credit is one factor of good credit, so closing an old card could lower your score.

Paying Off All Debt

Lenders like to see that you can manage debt. Paying off all debt can lower your score. Keeping a small, manageable balance and regular payments might be a better strategy.

Co-Signing Loans

Helping someone by co-signing a loan might seem like a generous offer but understand the risks. If they miss even one payment, that bad debt will show up on your credit report and could dramatically affect your credit score.

Applying for Credit

If you are considering a new car or home loan, you may think applying to multiple places is the responsible thing to do. Too many inquiries in a short amount of time can lower your score.

Ignoring Small Bills

Take all your bills seriously. Even small bills like cable or the pool service could end up in collections if not paid on time. A collection can negatively impact your credit score for up to 10 years.

Taking your credit seriously is only the first step. Understanding all the unintended ways you can damage your score is the best way to protect
your credit and financial health.