4 Common Habits That Could Be Secretly Harming Your Credit Score

Charlotte Miller

Updated on:

Did you know that certain seemingly everyday habits could secretly be harming your credit score? Having a strong credit score can impact numerous aspects of your life, from securing a good mortgage rate to passing job and lease application background checks and much more, so it’s important to make sure your score is as strong as possible. Unfortunately, there are a few common habits that could have a negative impact on your score without your realizing it. Here are some of the top habits that could be dragging down your credit score and thwarting your other financial efforts.

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  1. Accidentally Paying Your Bills Too Late Every Month

Do you ever miss a payment deadline or scramble to pay your bills on time every month? Unfortunately, this habit could very likely harm your credit score. If you recently checked your free credit score and noticed that it’s lower than you might have expected, review your payment history to see whether you have been:

  • Forgetting to pay the bills on time
  • Not scheduling a monthly automated payment
  • Missing payments altogether

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  1. Using Up Too Much of Your Credit Line

Although you may be under the impression that using your credit line is a good move, the truth is that your credit utilization ratio is what ultimately impresses lenders and helps to raise your credit score. While you don’t want to skip using your cards at all, maxing them out or using too much of your available credit can make you appear less creditworthy and less financially responsible. Make sure you use:

  • 30% or less of your total credit line
  • No more than what you can afford to pay back each month
  • Slightly more than 0% in order to maintain a good credit score
  1. Never Checking Your Annual Credit Report

If you’ve never gotten into the habit of checking your credit reports at least once per year, now could be the right time to start. Looking over your annual credit report not only helps keep you informed but also alerts you to potential errors such as:

  • Mistakes in credit bureau reporting
  • Questionable statements
  • Fraudulent items
  1. Opening Too Many Accounts in a Short Period of Time

Although it may help your credit score to have a mix of cards and loans in your credit history, opening up too many new accounts in a relatively short time frame can make lenders skeptical as to whether you’ll be able to pay back your debts. Avoid opening more than one account every few years, since too many new credit lines in a short period of time can:

  • Lead lenders to question your creditworthiness and trustworthiness
  • Harm your credit score
  • Lead to a red flag on your credit report
  • Lower your chance of easily securing future financing

Avoiding common mistakes that could be secretly dragging down your credit score is essential in order to maintain or achieve a good score and continue practicing financially healthy habits. Thankfully, becoming aware of the most frequent errors that could be harming your credit score can help you change your habits for the better.