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7 Mistakes That Destroy Your Credit Score

good credit scores just ahead illustration design over white

1. Not periodically checking your credit report

Many people only look at their credit report when they’ve been denied for a loan or credit. Inaccurate or missing information in your credit report could raise your borrowing costs or cause delays when you’re in a rush to make a major purchase, like a car.

2. Not using your full legal name in financial documents

Bank accounts, credit applications, and other documents that become part of your credit history come to be on your report through a variety of ways. Using your full legal name helps to make sure that your information ends up on your report. According to a FDIC senior Consumer Affairs Specialist, it’s not uncommon for a child and parent with similar names to show up on each other’s credit report.

A chart showing a fair score

3. Applying for Store Credit Cards

It can be tempting to fill out that little application form to save X% on your purchase in the store that day. In fact, you might assume taking advantage of these savings are a good financial habit.

But did you know that just by applying, you are opening a line of inquiry on your credit that could negatively affect your score?

The more “hard inquiries” on your credit, particularly within a six- to 12-month window, the more you damage your score.

Don’t apply for a credit card until you need it and you know with a good degree of certainty that you’ll be approved. And for the record, no one needs a credit card to a department store.

4. Not paying the minimum amount required

If you don’t pay at least the minimum amount due, your creditors will eventually report your account as past due, which can damage your score. Additionally, paying less than the minimum can result in late fees and additional interest charges which can add up quickly.

A pie chart showing the percentages of what is taken into account on a credit check

5. Keeping debt levels too high

If you “max out” or already owe a lot of money on your credit cards, potential creditors may question your ability to repay. Creditors also use this information to evaluate loan approval or interest rate charges (higher interest rates are used to compensate for higher risk).

6. Owning too many credit cards

While offers to sign up for credit and department store cards with free gifts or extra savings may be tempting, having access to all of that credit may be detrimental to your credit score because, even if you don’t use the cards, potential creditors may worry that you won’t be able to repay a new obligation if you decide to use all that credit. Plus, all those “inquires” into your credit report may indicate to lenders that you are having financial troubles or are on the verge of getting too deeply into debt.

7. Not alerting creditors if you’ve moved or changed names

If you move between apartments frequently and don’t change your address on bills, you run the risk of not receiving bills on time and suffering late payments as a result. Not notifying creditors of a name change could result in your credit report not accurately reflecting the credit you’ve worked to build.