What Damages Your Credit Score?
Have you ever wondered what damages your credit score? Several credit behaviors can lower your credit score that you might not even be aware of.
There are many ways to lower your score, from paying your bills late to canceling a card that you’ve already paid off, having a small credit portfolio, and failing to make the minimum payment.
In this guide, we’ll outline what damages your credit score and discuss how to avoid these pitfalls. Keep reading to discover how a title loan for poor credit from Delaware Title Loans, Inc. can help with a financial emergency.
Seven Factors That Hurt Your Credit Score
1. Failure To Pay Bills Responsibly
Paying your bills (utilities, rent, etc.) responsibly each month can boost your credit score by several points. But it’s also worth noting that not paying your bills on time can hurt your credit score.
2. Failure To Make The Minimum Payment
Generally, credit card companies require borrowers to at least make the minimum monthly payment to avoid penalties and fees. It’s easy to fail to make these payments when you’re on a tight budget, but doing so can help prevent your score from dropping by a few points each month.
3. Canceling Paid-Off Credit Cards
It’s a great day when you pay off your remaining balance on a card, but don’t jump the gun and cancel it. Although removing it from your file may seem wise, doing so can lower your credit score.
You should keep the card, even if you don’t plan to spend with it again, as it will help you maintain a robust credit portfolio that boosts your score.
4. Having A Small Credit Portfolio
Part of building a good credit score has a portfolio that’s not too big but not too small. Having just one credit card in your name and no other sources of credit could be keeping you from getting a higher score.
Experts suggest having both revolving and installment credit in your portfolio. You should also keep things varied with more than one card or loan. Connecting your bank account to report bill payments can expand your portfolio and boost your score.
5. Cosigning With A Bad Re-Payer
You should think again if you plan to help a friend, partner, or child by cosigning with them for a credit card. If you cosign with someone who is terrible at making their payments on time and exceeds their limit, those actions will affect your credit score, too.
6. Hard Credit Inquiries
Applying for a mortgage or a car loan can lower your credit score by several points because these lenders perform hard credit checks. When you shop around at car dealerships specifically, you have to be careful about how often these credit checks are being performed on you.
Luckily, most credit monitoring services and local banks only perform soft credit checks to open accounts. But you should be sure to find out before you apply for accounts and services that might require hard inquiries.
7. Exceeding Your Credit Limit(s)
This one is more obvious regarding wrong credit moves, but you should stay within your credit card limit at all costs. Sometimes, emergencies happen, and it’s the only option. But even a minor slip-up can negatively affect your credit score when spending more than you can borrow.
Inquiry About A Title Loan For Poor Credit Today
Although there are steps you can take to avoid what damages your credit score, in some cases, you end up with a less-than-satisfactory score. This is where Delaware Title Loans, Inc. can come in handy, as we offer a title loan for poor credit. Although this type of loan won’t improve your credit score, it’s also less likely to hurt your credit score, and you can even find out if you qualify with bad credit.
The process could take a minimum of 30 minutes in person, and you need to be ready to provide your driver’s license or state-issued ID, the vehicle for inspection, and the paid-off, lien-free title to your car. If you qualify for one of our title loans ($300-$15,000), you can keep your vehicle, using its title as collateral in exchange for a borrowing amount.
Fill out our online inquiry form to get the title loan for poor credit process started today!
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.