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Five Things that can Bury your Credit Score

By George Hauser
Published: Saturday, November 7th, 2009

The goal of every consumer who has started building credit is to protect his credit score. This means he should be equipped with the right knowledge about how to increase this three digit number or how to repair it when it comes crashing down. There are many credit score tips you can apply to do either of these. 

A good number of creditors, employers and insurance companies rely on the credit score to determine your creditworthiness. Of course, you would want to score high. However, if you have difficulties understanding how to do that exactly, perhaps it’s a lot easier to understand the things that would instantly burry your credit score, and yourself in financial crises. 

Pay late

Looking at various credit score tips would tell you about the importance of paying your dues on time. This is because thirty-five percent of your credit score comes from your payment history. This means that all the payments you have made are recorded in your credit report which then included in the mathematical formula to produce your score. 

All your late payments will most often than not be reported by your creditors to the credit bureaus. This information does not contribute to the increase of your credit score. 

Don’t pay at all

As mentioned almost if not all your payment activities are surrendered to the credit bureaus and recorded in your credit history. Paying late will definitely hurt your credit score; not paying at all will kill it.

 Let your account be charged off

This is easy to do if you really want to send your credit score crashing. On the other hand, paying on time is one of the credit score tips that prevent this from happening. When you have a charge off report from your creditors, this means that they have given up hope on your paying. An account that’s charged off is the worst thing your credit score will have to face. 

Wait for collectors

The collectors will start to call you or pay you a visit when your creditors try to collect payment from you. This implies that they can no longer wait for you to pay voluntarily. The collectors or your creditors will report this even to the credit bureaus. Helpful credit score tips are created so that you would never have to face collectors or read the collections status on your credit report. This is because such damage your score badly.

 Default on a loan

Credit scores are not the only ones that get affected by a single type of credit. Even your status with your loans can either make or break your credit score. There are credit score tips that tell you how to handle installment credit to help raise your credit score. In contrast to this, you can expect a loan default on your credit report to hurt your credit score.

 This means that you have failed to meet the terms of payment you have previously agreed to with the lender. Having loan defaults on your credit report has the same impact as having charge offs in your credit card accounts. 

These things are the worst five things for your credit score. You should by all means prevent your credit report from containing any of these. If you do however, failed to pay your dues on time, or have accounts being charged off, there are still things you can do to repair your credit report and bring your credit score back to life again.

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