Things that Lead to Bad Credit

Every consumer must think about maintaining a good credit history. But maintaining good credit may not always be so easy. In this article, let’s discuss the factors that can lead you to bad credit and how you can avoid them:

Occasional Late Payments

You final FICO score is based upon 15% payment history. Have you been prompt in paying your bills? Or were you often delayed submitting payments? Even occasional late payments can badly affect your credit score so pay attention.

 

Avoid high credit-to-debt ratio

Any financial expert would agree that using more than 30% to 40% of your credit limit can be damaging. Even a low interest credit card should be used to the fullest. If you do, you could be putting a burden to your credit-to-debt ration.

Charge Offs

A record of charge-off shows that there have been past due debt sin your account. Even if your lender stops debt collection, it can report charge-off to the credit bureaus. Other lenders can see this as a warning and may automatically decline your credit application based on your credit report.

 

Multiple credit report inquiries

Multiple subsequent inquiries on your report from credit card companies or lending companies can also send a negative impression. A creditor may doubt your intentions as to why you’re trying to open too many credit card accounts or if you can manage multiple accounts and still keep up with your payments.

False charges and erroneous information

Have you checked your credit report for possible errors or wrong information? You have the right to dispute errors and request for a change. Checking your report at least twice a year will help you avoid the possibility of a low score resulting from incorrect charges. Don’t be a victim of ID theft and bad credit. Obtain a copy of your report from the three credit reporting agencies and exercise your right as consumer.

Elizabeth Roberts

Elizabeth Roberts

Liz Roberts and her team are continuously providing information to people who are ready to repair their credit and improve their credit score. Also NewHorizon.org team strives to empower the homebased and small business owners by bringing information that can help them to manage and grow their businesses. Let our 24+ years of business finance experience help you to get the financing you need! CONTACT US if need financing for your business.

3 Comments
  1. this is a great read! people should be aware and do a lifestyle check from time to time

  2. The best and easiest thing i did to improve my credit was to start using online bill payment. It took me 6 months to work things out perfectly, but its really working for me. I put myself on a budget and slowly weaned myself off of using my regular credit cards and switched to a prepaid credit card with credit builder. They charge extra for it but its worth it. I called my creditors and the ones that allowed it, I changed the due dates so that the feel a week or 2 after I got paid. Then i set up minimum payments so that at least I made a payment and it got there in plenty of time!

    It took me so long because I was having trouble separating need from want, but now I have my bill pay set up, I don’t spend more then what I’ve put on my prepaid credit card for my daily living and my payments are being paid on time. I now average about $500 at the end of the month that I can split up and send to my high interest credit cards.

  3. How do you get landscaping on credit?

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NewHorizon.org is an independent, advertising supported website. The owner of the site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. NewHorizon.org has not reviewed all available credit card offers in the marketplace.

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