Top 10 Credit Score Killers
- Don’t co-sign for anyone on anything.
What I mean is do not offer or say yes, to co-signing for someone’s car, apartment, credit card, house, etc. It does not matter if they are your family, your lover, your kids, your cousin’s friend, your mom’s employee, etc… Don’t do it!!! This situation can turn very ugly as I have seen with many of my clients that have big hearts.
- Don’t pay your bills more than 30 days late.
Banks do not report the payment as late until 30 or more days after the due date. Paying your bills late will result in late fees, however, you don’t want to screw up your credit score as well. Payment history is the largest portion of your credit score, and one late payment can drop your score over 100 points and cause you to get denied for any major life goal you want to get next that requires credit.
- Don’t run your credit a bunch of times before and during the home buying process.
The bank checks your credit before your loan application, AND AGAIN right before you close on the property. They want to make sure you aren’t over-extending yourself (per their strict underwriting criteria). Wait until you have the key in your hand before you start using your credit again!
- Don’t close old credit card accounts.
If you do this, you will remove the age of these accounts. Removing the age of your accounts will tarnish 15% of your credit score (which is the third largest portion), so don’t do it! Don’t call the bank to close an account. If you don’t trust yourself with a credit card, cut it up and throw it away! But don’t lower your credit score for closing out accounts unless you are trying to lower your credit score.
- Don’t let false negative information remain on your credit report, thinking it will simply fall off.
Over 90% of people have errors on their credit reports due to admin error at these banks, on the creditor side and even at the credit bureaus. Work with a reputable credit repair company (like us) to work through removal of negative information on your credit report. We have a phenomenally fast credit sweep program that will help you remove these issues. Credit sweep is an expedited more effective version of credit repair that focus’ on removing negative items from your credit report. Our results and testimonials don’t lie!!!
- Don’t max out all your credit cards.
30% of your credit score is made up from your debt, meaning the “amounts owed” in comparison to the available credit that is showing on your credit report. This is the second largest portion of your credit score! To get the maximum amount of points on this part of your credit score, keep your balances as low as possible, but no higher than 29% utilization.
- Don’t start making payments on your student loans if you are unable to commit to it for the next 15 years.
You can defer your student loans for YEARS. There are all types of hardship requests you can do. Be sure to get your account set up online, so you can request your extensions online versus calling them directly. If you call them to request the forbearance, they are trained to pressure you into a payment plan that more than likely, will not work for you. Causing you to default or make late payments, screwing up your credit score for 10 years. Trust me, there are many different types of student loan forbearance options that are available to you, you just must request it online within the portal of your student loan processor (typically, Nelnet).
- Not having enough ‘credit mix’. This is 10% of your credit score.
- Don’t apply for new credit often. Another 10% of your credit score is this.
Every time your credit is ran, your score will drop regardless of if you get approved or not. Many lenders have a criteria where they will not lend to you if you have more than a pre-determined number of inquiries within the past 6 months (for example chase, if more than 4 inquiries in the last 6 months, don’t bother to apply!) We have an inquiry removal service that removes pesky inquiries not associated with positive open accounts, so you can reduce your number of credit inquires. Car dealerships are the worst because they submit your loan to multiple banks, where they all pull your credit report to see if they will lend to you, and if so, at what interest rate.
- Don’t say, “I don’t do credit cards.”
What I am saying, is you need a credit card, in order to have a good credit score. If your philosophy is “I don’t do credit cards,” it’s probably because “credit cards do you.” You must learn how to use them responsibly to build credit and we can teach you. You must build your credit score, so that you get approvals for major things that you want, at a payment you can afford. The higher your credit score, the better your interest rate will be, meaning, the lower your payments will be. So, you can keep more of your hard-earned cash in your pocket instead of forking it over to the lender because “you don’t do credit cards.”
No-one is perfect, I get it! I’m far from it. But knowing how the credit scoring algorithm works allows you to understand what you can do to quickly boost your credit score before you make any major purchases. We can help you streamline and fix all of these items above. We have helped thousands of clients! Credit boosting fast is our specialty and we are AMAZING at it.
P.S. Which one of these tips above is hardest for you to manage and why? Let me know in the comment section below!!!
Wholesale Tradelines AKA First Coast Financial Matchmakers
904-515-6698 (call or text for a free credit consult)