5 Surprising Ways You Could Be Hurting Your Credit
When it comes to protecting your credit score, you probably know the basics: pay your bills on time, don’t max out your cards, and avoid piling on too much debt. But here’s something that may surprise you. Some choices that seem smart at first glance, like paying off all your debt or closing old credit cards, can actually work against you.
Let’s walk through a few habits that might be hurting your credit, even if your heart is in the right place.
Closing Old Credit Cards
It can feel satisfying to tidy things up by closing out a card you never use. But the length of your credit history makes up a big part of your score. That old card you have been holding onto? It shows lenders you’ve been responsible for a long time. Closing it could shorten your credit history and lower your score.
Paying Off All Your Debt
Yes, paying off high-interest debt is important. But lenders also want to see that you can handle debt well. Having a small balance that you pay down consistently shows you are dependable. Wiping every balance to zero all the time might make you look less active as a borrower.
Co-Signing Loans
Helping a friend or family member can feel like the right thing to do, but co-signing ties your credit to theirs. If they miss a payment or fall behind, it will show up on your report too. Be careful before signing your name on someone else’s loan.
Applying for Credit Too Often
Shopping around is smart, but each application can trigger a hard inquiry. Too many in a short time can drag your score down. If you can, spread out your applications.
Ignoring Small Bills
That little bill you forgot about, like an old gym membership or cable fee, might not seem like much. But if it goes to collections, it can leave a mark on your credit for years. Keep an eye on your statements and make sure nothing slips through the cracks.
Protecting your credit is not just about avoiding the obvious mistakes. It’s about knowing the little things that can sneak up on you. By staying informed and paying attention to the details, you’ll keep your financial health strong and steady.