Did You Know These Things Could Damage Your Credit? (Part 2)

November 18, 2013

Being aware of how these practices can impact your credit rating can help you avoid inadvertently damaging your otherwise good credit.

Being aware of how these practices can impact your credit rating can help you avoid inadvertently damaging your otherwise good credit.

Continuing from Did You Know These Things Could Damage Your Credit? (Part 1)¸ here is some additional information regarding unconventional things that may damage your credit score. Being aware of how these practices can impact your credit rating can help you avoid inadvertently damaging your otherwise good credit. In addition to hard inquiries on your credit, the following could hurt your credit score:

  • Not using credit cards – While credit cards can get you into financial trouble if you are not responsible about how much you purchase with them (and if you forget to or are unable to make the monthly payments on time), using your credit cards is crucial to establishing a credit history and building a good credit rating.

    In fact, not using credit cards you have or not having any credit cards to use can, in some cases, be as damaging as not paying your bills on time. The key is to use them responsibly, pay the monthly bills on time and, whenever possible, not maintain a balance on the credit cards.

  • Financing the cost of home furniture – Many furniture retailers offer deals that involve zero interest for the first year (or more) of financing your purchase. While this may be an attractive offer on the surface, particularly for individuals who may not have a chunk of cash to drop on such a large purchase, these offers are seen as “last-resort” types of loans and, as such, could make borrowers appear to be high risk.

    Additionally, accepting such offers will immediately put a large balance on your credit report, which will, in turn, dramatically inflate your credit utilization rate. The higher this rate climbs, the more likely your credit will suffer from it.

  • Not paying city fines – City fines such as parking tickets may seem inconsequential in the scheme of things, but failing to pay them can harm your credit score if the unpaid bill is eventually sent off to a collections agency. So if you get a ticket, pay the fine as soon as possible so you don’t run the risk of forgetting about it.

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Categories: Blog, Credit, Credit Card Debt, Credit Cards, Credit History, Credit Reports, Credit Score, Financial Tips