3 bad choices that can damage your credit score

Your credit score is a big deal. Lenders use that number to decide what kind of loan you’ll be able to get and what interest rate you’ll have to pay. If your credit score is low, you should find some ways to raise it. If your score is good, here are three choices you should avoid if you want to keep it that way.

Cosigning a loan: You’re a nice person and you do nice things for people you care about. You should never cosign a loan. EVER. You’ve got to look out for your own personal finances. If the borrower starts missing payments, your credit score will take a hit. The last thing you want to do is have to pay money to keep your credit score up and get absolutely nothing in return.

Closing a credit card account: The first credit card you ever had probably wasn’t a rewarding one. You probably got it so you could build credit or just to have in case of emergencies. You may have paid if off and decided to stop using it, but don’t close that account. For one thing, that card has a long credit history, which is good for your credit score. Also, closing the account will lower your amount of available credit which could negatively affect your debt utilization ratio. That’s one action that can damage your credit score in two different ways.

Not looking for errors: You should always keep a close eye on your credit score. If you haven’t looked at yours recently, or ever, check out Credit Karma. It’s free and easy-to-use. If you don’t keep an eye on your credit report, you could have your identity stolen and not know it. Even if nothing malicious is happening to you, there could still be inaccuracies. The day you find an error is the day you’ll be super glad you checked.


John Pettit

John Pettit

John Pettit is the Managing Editor for CUInsight.com. John manages the content on the site, including current news, editorial, press releases, jobs and events. He keeps the credit union ... Web: www.cuinsight.com Details

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