You might have a great credit score or you might be building up to a great credit score in order to purchase a home, but there are ways to sabotage your credit and ruin a perfect credit score.
Here are four ways to ruin a perfect credit score or, things not to do in order to keep your credit as high as possible.
Charging up to the max each month even if you pay it off.
You might think that this is a smart way to earn credit and increase your credit rating but it’s best to not max out your credit cards each month. If you keep the ratio below 20 to 30% of the maximum amount of credit offered and then pay it off, you credit score should remain relatively healthy. If you charge everything on one card to rack up points or miles but then pay it off you still may be doing damage. Try to keep the balance under 20% and pay it off each month.
Your credit might be great as long as you don’t include your spouse.
You might not think that your spouse’s credit history has anything to do with yours and although credit bureaus keep separate scores for spouses, their actions still can hinder your credit score. Any joint accounts or loans were you both are covered can be effected, especially if one spouse fails to pay on time or keep the high credit limit.
You close or open several credit card accounts at one time.
Closing all of your accounts at the same time can result in a low credit score because those that you do have open now affect the overall credit score that you have. Also, opening any additional cards may decrease your overall credit ratio because every time you apply for a card there is an inquiry on your credit history, which can penalize your overall score. Also, make sure you don’t open any new credit card accounts within about three months of applying for home loan.
Cosign a loan for a family or friend.
Remember when you cosigned on your sentence car loan back in 1995? That may still be hanging on your credit history creating a negative response. Make sure that you are clear of any cosigning loans that you may have hanging out there. Any loan status, even those you are not paying on camera near credit report and if that person has negatively impacted their credit history it can also negatively impact yours.
Get started today by knowing your credit history, getting a copy of your credit report and working towards increasing your credit score overall.