Your credit score is a pretty important number in your life. Some might say it’s the most important number in your life. After all, this is the number that determines whether or not you can get a job, buy a house, get a loan or do most anything you might imagine. It’s important, and we know that you want to keep your credit score as high as possible. The problem, however, is that it’s not always that easy to do just that. What happens when your credit score drops and you don’t know why? It’s easy to know that your score will drop if you’re out making late payments on things, if you’re skipping payments or if you are maxing out all your credit cards, but what happens when your score drops and none of the above has occurred? The answers aren’t simple, but we can help you figure them out.
You have an unpaid parking ticket
Yes, this is true; and no, I didn’t even know this. Fortunately for me, there is nowhere but parking lots or driveways to park where I live, so I’ll never get a parking ticket. In fact, I don’t even know if police officers hand out parking tickets around here. However, forgetting to pay one parking ticket can result in a collection agency taking over and your credit being negatively affected.
You have too many credit cards
You didn’t think it mattered how many cards you had so long as they don’t have a balance, right? Wrong; the max number of credit cards you should carry is five, but we recommend not having more than three. Keeping it between three and five will keep your credit score looking good. Creditors might see that none have a balance, but they will wonder what might happen if you decide to go on a spending spree. If you have more than five cards, start closing accounts – but be sure you cancel new accounts. Closing your older cards can hurt.
Overdue library books
I remember in high school one of my friends was unable to accept her diploma or even walk with us at graduation because she had an overdue library book from her freshman year she just honestly forgot about. She had to pay over $100 in late fees and fines because of it, and that’s how she was able to graduate with us. Now imagine in the real world that your overdue library book is sent to a collection’s agency and your credit report is affected over a $10 book for the next seven years. It happens. Return those books on time or face the wrath.
Consolidating credit card debt onto one card
It might be very tempting to put all your balances from your cards onto one brand new card with no interest so that you can pay it off a bit cheaper, but it’s a bad idea. What it does is clear up some other cards, but it makes your credit score drop. Why? Because now you are exceeding your 30% recommended debt on one card, and it looks bad. It looks really bad to have a high balance on one card and none on others, even if you are working hard to pay them off. A much better option is a small personal loan you can use to pay these cards off and raise your credit score.
Not having your own credit after marriage
This might happen more than you think. When you and your spouse apply for all your credit jointly, it can have a negative effect on both of your individual credit scores. Additionally, if you take the time to only use one partner’s credit, you might even find that you have to rebuild your own if you want to have any. Let’s say your credit wasn’t the best when you got married, so everything is in your spouse’s name. You might begin to think that after a few years your score is better, but you have no individual credit anymore, so you don’t actually have any good scores to call your own. It happens; be sure to keep things pretty equal in your marriage to avoid this one.
Overall, there are so many things you can do to affect your credit in a negative light, just as you can do other things to affect it in a positive light. Your job is simply to make sure you are using your credit wisely. Pay your bills on time, pay off your credit cards each month, don’t go applying for every card under the sun to save 15% on your total purchase for the day (unless it’s a big, big purchase like new appliances or new floors or something) and check your credit score every few months to make sure there are no mistakes on your credit report.
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