September 03, 2015 /276

 

5 Ways To Avoid Hurting Your Credit

 September 3, 2015  37

 

After reading up on credit scores, you’ll probably notice that every day life actually can ding your scores. Even something as simple as perusing for a new car can mean that your credit can drop as much as 20 points – just from a hard inquiry alone! With credit scores being so fragile, how can you avoid major credit damage? We decided to offer some tips.

  • If you do need to get a loan or a mortgage, try to make sure that all your applications involving hard inquiries happen in the span of two weeks. This will often be counted by credit agencies as a single hard inquiry, so you will end up doing less damage than if you had decided to do the entire loan application process through the span of a month.

  • Don’t max out your credit cards. Around 30% of your score will be based on your spending habits. Too much use of too much of your credit limit will make your credit score sink – and fast. If you are using over 25% of your total credit limit, you may want to work at paying down debt before you charge anything else.

  • Avoid opening up cards and loans that you don’t need or won’t be able to pay off. If you don’t need or can’t handle them, do not try to get them just to boost a credit score. It will most likely backfire and cause you to end up with a worse credit score than before. Sometimes, the best thing that you can do to improve your credit is to avoid making the same mistake again.

  • Keep your guard up against ID theft. Sometimes, a perfectly honest, bill-paying person will end up seeing their FICO score get ruined by a thief who used their identity to get access to a loan, a credit card, or even a bank account. It can also take quite a while for the effects of identity theft to fully be rescinded. The best medicine is often an ounce of prevention. Keep your records safe, and avoid doing business with shifty merchants.

  • Don’t repeatedly ask for credit line increases when trying to improve your credit score. Most of the time, credit line increase requests mean that your creditors will run a hard inquiry on your credit report. Every time a hard inquiry is run on your credit report, you will end up dealing with another ding on your credit score. It’s often better to just ask for a limit increase once a year, and let the credit card companies decide what to do with you otherwise.

Your credit is fragile, and it can easily be hurt if you aren’t careful – or even if you choose to use the wrong credit score advice. By using this tips, you can avoid hurting your credit score and work harder to improve it.

 

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