Technology

These Things Are Hurting Your Credit Score

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A high credit score comes with a lot of benefits. It makes it easier to apply for loans. It gives you lower interest rates. It raises your chances of getting approved by banks, credit unions and other lenders. Every time you need to borrow money or make a big financial change, your score will come in handy.

The opposite is true when you have a low credit score. So, how can you make sure that your number doesn’t rank close to the bottom? Fix these three things.

Opening Too Many Accounts

Achieving “good credit” is a challenge. Having no credit accounts gives you a low score. But, on the other end, opening too many accounts also guarantees a lower score. This is especially true if you’re applying for these accounts all in a short period of time and if you’re racking up high balances. Juggling too much at once is seen as poor financial management.

Making Late Bill Payments

Paying your bill late once, won’t affect your credit score. But paying your bills late often? That certainly will. The longer that you wait to pay after the due date, the more it will affect your score.

Carrying Too Much Debt

One of the biggest things that affect a score is a heavy debt load. Credit bureaus will determine your debt load by looking at your credit utilization, repayment history and your credit ratings — these are ratings between R1 and R9 made by lenders, recording how successful you were at paying your bills. Click the link to learn what does R9 credit rating mean and to find out why it’s connected to filing for bankruptcy.

How Can You Improve Your Score?

You can improve your score by addressing these credit mistakes as soon as possible. The earlier that you tackle the problems, the better.

If you have a lot of credit accounts, don’t close them. Closing accounts will affect your score. Instead of making any big decisions, work to manage your accounts properly. Your goal should be to achieve a good balance.

If you’re having trouble keeping track of your bills and missing the deadlines, there are some simple solutions. You can use online banking to automate your bill payments — this means that the necessary funds will be automatically taken from one of your accounts whenever the bill is due. The strategy is good for recurring, fixed payments. Essentially, bills that cost the same every single time.

You can also use calendar apps, bill monitoring apps and online planners to remind you when a deadline is coming up. Technology can help you with this responsibility.

If you’re having trouble with your debt load, you should address it as soon as possible. Put together a monthly budget. Cut everyday costs to put more savings toward repayments. Sign up for credit counselling sessions. And, if all else fails, see a professional for help. A licensed insolvency trustee can talk to you about debt relief strategies like consumer proposals or personal bankruptcy.

Your score doesn’t have to stay on the lower end forever. You have the power to push it up the ranks. Take control of the situation.

Heather Breese
Heather Breese is a qualified writer who fell in love with creativity and became a specialist creator and writer, focused on readers and market need.

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