What Damages Your Credit Score And How To Avoid It
August 11, 2021 | June Mckaig
Credit scores are a complicated and touchy subject for many Americans. Nonetheless, your credit score has the power to change your life. Without good credit, you may never be approved for a mortgage and will struggle to find access to credit services. Therefore, it’s important to know what damages your credit score and how you can avoid it.
The length of your credit history, your ability to make payments on time, and the number of accounts in your name all affect your credit score. If your history is too young, you have missed consecutive payments, or you only have a single account, your score may be suffering for it.
Here are some things that can damage your credit score and how to avoid them. If you still need help finding financial help with emergencies, ask “are there any title loan places near me?”
What Damages Your Credit Score?
1. Payment History And Your Credit Score
Your credit score is essentially a record and verification of how successfully you have paid off your past debts. This means that the more likely you are to pay your bills on time, the higher your score will be. Unfortunately, though, our finances sometimes get tight and we miss payments. If you’re wondering what damages your credit score, this is it.
Even a single missed payment can have a negative effect on your credit score. Missing a payment by more than a month can drop your score a full 100 points. Anything past 120 days and your account will likely be closed and you’ll receive major negative marks on your score.
To avoid these problems you can follow these tips:
- Manage your expenses daily.
- Never put anything you can’t afford to pay off on your credit card.
- Make the minimum monthly payment before the due date.
- Try to pay more than the minimum.
Over time, your score with improve and you’ll be able to access better credit services.
2. The Length Of Your Credit History
Even the length of your credit history can negatively affect your score. Since your score acts as a record for your payment history, if your credit history is only a few months old, you likely won’t have enough payments to create a substantial score.
This can put you in a tough position. You need access to some form of credit to build a good score but you can’t access credit because you don’t have a history long enough to qualify. To get around this problem, you can slowly build credit by:
- Applying for a starter credit card – you may have put down a deposit as collateral.
- Finance a piece of furniture.
- Pay off a small one-time loan.
If you need immediate financing, this can be a dreadful place to be in. Instead of lamenting what damages your credit score, ask yourself “where are the title loan places near me?”
3. Total Credit Utilization And Your Credit Score
Total credit utilization is definitely a big one on the ‘what damages your credit score’ list. Even if you have a long history of making payments on time, you might be damaging your credit score by using too much of your credit line at once.
Credit bureaus also factor credit utilization into your score. This is the amount of credit you have used out of your total available credit. For instance, let’s say you have 3 credit accounts with a maximum line of credit worth $2,000 each. If you have used $1,500 of credit on each card, you’ll have utilized 75% of your credit.
Even if you make your minimum payment in time, credit bureaus will deduct points from your score because they view you as less likely to pay off the total amount in a timely manner. To avoid receiving negative hits because of your credit utilization, try to keep the total amount you’ve used under 25%. For instance, only keep $250 on a $1,000 limit card at any one time.
What To Do If You Need Money Now
If you’re facing a major emergency and don’t have the credit to pay for it, you may feel trapped. Rather than wondering what damages your credit score, ask yourself “where are the title loan places near me?”
Southwest Title Loans can help you secure title loan money in as little as one day. Simply fill out our online application form or give us a call and we’ll be in contact soon to discuss how we can help. All you need for the Arizona title loans process is:
- A lien-free car title.
- A government-issued ID such as a driver’s license or passport.
- A bill stub or other proof of income.
- Proof of residency.
Once we have your information, we can offer a quote for your loan amount, up to $15,000 depending on your vehicle. Before you sign, we’ll walk you through the terms and conditions and guarantee that you understand the payment plan.
Best of all, though, title loans won’t negatively affect your credit score. You are likely to be approved even with low credit and we won’t report your loan to the credit bureaus!
Avoid Damages To Your Credit Today
If you’re dealing with a low credit score, you’re probably wondering what damages your credit score. Instead of stressing over where you can get financing in an emergency, ask yourself “where are the title loan places near me?” Southwest Title Loan is ready and standing by to make you a deal on your title and get you out of whatever financial jam you find yourself in.