If You Want to Destroy Your Credit With Your Credit Cards, Do These Five Things

In American society if a person wants to buy things that are more expensive, such as a house or a car, they must attain what is known as a credit score. This is a score that allows lenders to determine whether or not a person is able to pay back their debts. Credit scores range from 300 to 800 with the average scores being between 620 and 700. If a person’s score is average or high, they have a good chance of getting the loans they desire. Conversely, if their credit score is low, they will have to settle for subprime loans or simply wait until their credit gets better. However, there are certain things that can make anyone’s credit go down, even individuals who are lucky enough to get the big 800. Here is our version of the top five things people need to avoid if they want to make sure their credit score stays high. 1. Making Late Payments Most credit cards define late payments, as those made 15 days from the date the payment is due. If a person can make their payment within this window, most creditors won’t consider the payment late. However, if the payment is made after this timeframe, the late payment is considered late and a late charge fee will be attached. Fortunately, this is not reflected on a person’s credit report until it is at least 30 days past due. Keep in mind that a late payment is still better than no payment, but avoid being more than 30 days delinquent to keep the credit report clean. 2. Having too High a Balance It is not a good idea to max out one’s credit card accounts, even if they have the ability to make the monthly payment. Not only does this practice eventually catch up with them, but it is also not favored by credit reporting bureaus. While it is true they do want to see that payments are being made on a little bit of credit, too much credit indicates that a person may be living beyond their means. One of the biggest negatives on a person credit report that does make timely payments is the ration of credit balances to available credit. Try to keep your balance beneath one third of the available credit. 3. Closing Credit Cards Many people think closing their credit cards will make their credit score go up. But it actually works the opposite way, since the more credit one has available the more lenders see them as being credit worthy. Yet, the key word is ‘available’ credit. If a person has 10 credit cards, and all of them are maxed out, lenders will think they are not in proper control of their debt. Compare that to a person that has the same amount of cards with no more than 35 percent debt on them. Lenders will see that person as being more responsible, since they have the credit available to them but they don’t need to use it. 4. Signing Up for Department Store Credit Cards too Quickly While having a few department store credit cards is actually good for one’s credit score, if one signs up for too many, one right after the other, things will not look favorable to the credit reporting bureau. It is for this reason people must forego the temptation to sign up for a whole bunch of department store credit cards in hopes of getting discounts, free gifts or whatever other incentive that is being offered. 5. Judgments from Default If you ignore the collection calls long enough after you stop making your credit card payments, the credit card company is not going to go away. There may be lengthy delays between the times a credit card company contacts you about the debt you may have with them. Just because they delay does not mean they have given up the right to proceed with much harsher collection techniques. The ultimate end all procedure is to now seek a judgment against the individual who has defaulted on the credit card debt by proving the matter in a judicial court. If you do not defend the company’s claim that you owe the money and have in fact defaulted on the debt, the outcome is almost always the award of a judgment in favor of the credit card against you the cardholder. Judgments are one of the most severe individually damaging items on a credit report and show up on the category of public records.