Credit scores are sneaky things that sound simple. You pay your bills in full and on time, and your credit stays perfect, right? Well, not quite. Here are some things that prompt bill payers may be surprised to know can hurt their credit score.
Credit Percentage Means a Lot
If you run up massive credit bills every month, that’s going to hurt your score. Yes, even if you pay them off in full and on time. The problem is using such a high proportion of your available credit. If you have ten thousand dollars credit available to you, and each month you run up six thousand, that high utilization of your credit limit doesn’t look good to the bank. Aim for using no more than twenty to thirty percent of your available credit each month.
For this same reason, you shouldn’t close a bunch of credit accounts all at once, even if they are accounts you never use. If you do, you’ll reduce the amount of total credit available to you and at the same time increase the percentage of credit you’ve used up.
No One’s a Friend in the World of Credit
Having other people entangled in your credit history is a recipe for disaster. Co-signing loans for a friend is one of the biggest risks someone with good credit can take. After all, if your friend had good enough credit of their own, they wouldn’t need to borrow yours. Should they ever make late payments on the loan, or worse, default, your credit score would be affected too.
The same goes for your spouse; navigating joint credit can be tricky. Anything borrowed from a joint account will affect both partners, but at the same time, putting all accounts in one partner’s name can make establishing new credit difficult for the non-named partner in the event of divorce. Joint credit works best when both partners can discuss finances and credit openly and act responsibly with money decisions.
Ovation Credit Keeps You Up-To-Date on Your Credit Score
The last way good bill payers ruin their credit is by not checking up on it. Remember, you’re entitled to receive a free credit report from each major bureau once a year. If you can afford it, check it even more. By checking regularly, you can make sure that mistakes or out-of-date information don’t linger long on your report and decrease your credit score.
If your credit isn’t what you want it to be, talk to an Ovation Credit specialist about ways to repair your credit and get you back on the path to financial health today.