Surprising Things That Can Damage Your Credit Score

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You’ll want to avoid making these mistakes to accidentally tank your credit score

Your credit score is an essential aspect of personal finance and has a significant impact on your life. It’s a crucial piece of information that lenders use to evaluate your creditworthiness. Your score will determine your eligibility for loans and credit cards to affecting the interest rates you receive.

However, many people are unaware of the surprising things that can negatively affect their credit scores. Did you know a person with a low credit score can spend thousands of dollars more than someone with good credit?

Understanding Your Credit Score

First, let’s first understand what a credit score is and how it’s calculated. Your credit score is a three-digit number that ranges from 300 to 850. It’s used to represent your credit history and current financial situation. The score is calculated using information from your credit reports. This includes your payment history, credit utilization, length of credit history, and types of credit accounts.

Surprising Factors That Damage Your Credit Score

Now that we understand the basics of a credit score, let’s explore some of the surprising things that can negatively impact it:

1. Late Rent Payments

Think that paying your rent on time isn’t relevant to your credit score? You’re wrong. Late rent payments can be reported to credit bureaus and will negatively affect your credit score. If you have a history of late rent payments, it can reflect poorly on your ability to manage your finances and pay your debts on time.

2. Medical Bills

Medical bills can be a significant financial burden; if you’re unable to pay them on time, they can negatively impact your credit score. Collections for medical bills can remain on your credit report for seven years, making it crucial to address any medical bills as soon as possible.

3. Closing Credit Card Accounts

Closing credit card accounts can be tempting, especially if you’re trying to simplify your finances. However, closing a credit card account can negatively affect your credit utilization ratio and length of credit history, both of which are factors used to calculate your credit score.

4. Job Loss

Losing your job can be a significant financial shock, and it can also negatively impact your credit score. If you’re unable to make your debt payments on time, it can reflect poorly on your ability to manage your finances and pay your debts.

5. Hard Inquiries

Hard inquiries are a type of credit check that occurs when a lender or creditor requests a copy of your credit report. These inquiries can negatively affect your credit score, especially if you have multiple hard inquiries in a short period.

Bottom Line

Your credit score is important. It allows you to access bigger loan amounts and is a key indicator of your financial health. You may want to consider taking steps to avoid one or more of the above if you notice that you are experiencing any of them.


Check out our article on 10 ways to improve your credit to start your credit-building journey today.