7 Pernicious Spending Habits That Can Plunder Your Credit Scores

When it comes to our financial status, no instrument, or report  has more influence than your credit report and overall credit score. More often than not, individuals tend to overlook particular spending habits that are actually causing more harm than good to their credit scores.

Over time these errors and habits could quickly destabilize an individual's financial standing, even to a point of potentially setting themselves up for a downward spiral of debt without the necessary financial options available as a potential bail-out due to a weakened credit score.

Below we break down the 7 pernicious spending habits that if left unchecked will eventually plunder your credit score.

The 7 Pernicious Spending Habits That Can Plunder Overall Credit Rating

Not Paying Your Bills On Time

This is one of the most common credit problems and can have a major impact on your credit score. Late payments can stay on your credit report for up to seven years, so it's important to make sure you're always paying your bills on time.

Maxing Out Your Credit Cards

Another bad habit that can damage your credit score is using too much of your credit limit. This makes you appear as a high-risk borrower and can lead to higher interest rates. It's important to keep your balances low and only use a small portion of your credit limit.

Applying For Too Many Credit Cards

When you apply for multiple credit cards at the same time, it can have a negative impact on your credit score. This is because every time you apply for a line of credit, the potential lender will have to do a hard credit inquiry, which can temporarily lower your score.

Closing Unused Credit Cards

Many people think that closing an unused credit card will help their credit score, but this is actually not the case. When you close a credit card, you're losing available credit, which can make it appear as if you're using more of your available credit and can hurt your score.

Making Late Payments On Loans

If you have any loans, such as a car loan or student loan, it's important to pay your debt obligations on time. Late payments stay on credit reports for seven years and can have a major impact on your credit score, especially if it is not disputed in an attempt to remove it.

Not Having A Credit History

If you don't have any credit history, it can be difficult to get approved for credit cards or loans. It's important to start building your credit by getting a credit card and using it responsibly.

Having A High Credit Utilization Ratio

Your credit utilization ratio is the amount of debt you have compared to your credit limit. If you have a high credit utilization ratio, it can hurt your credit score. It's important to keep your balances low and only use a small portion of your credit limit.

How To Combat These Habits To Secure A Strong Credit Score?

With the constant improvement in technology we are constantly introduced to new, often faster and more efficient ways of conducting our day to day life and responsibilities. If you have reviewed your credit score and believe your spending habits have contributed to a less than desirable credit score, which you might be wondering how to control?
Thankfully, you have options, the first being the creation of a financial budget to track and limit your outgoing expenses and prioritizing the importance of your existing debts, or you can consult a credit repair company to help you boost your credit profile with their expert guidance.

The most important factor would be paying focused attention to the establishment of your credit score followed by methods you will use, or try to use to increase your overall credit score. This will take time, patience and discipline but the earlier you start, the more likely you are to master the processes necessary to get the most out of your credit score.

Bottom Line

It is ultimately the individual's responsibility to keep their credit reports free of any errors, as credit bureaus are subject to making mistakes. Individuals eager to increase their credit score will need to review their reports and identify any issues hampering the improvement of their credit scores.

If any serious issues are identified, or information has been incorrectly recorded to your account. Consider consulting credit specialist firms like Fair Credit to help you resolve your credit errors to set you on your credit building journey today!