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Five Ways to Hurt Your Credit Score

Written by Nickel - 3 Comments

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If you care at all about your credit score — and you should, because a low credit score can cost you big time — then you might be interested in checking out this list of five surefire ways to damage your credit.

1. Late payments. Not only can paying your bills late be an expensive habit due to the additional fees involved, but it can wreak havoc on your credit score. Indeed, payment history accounts for 35% of your credit score. In fact, a single delinquincy could drop your score by 100 points or more.

2. Carrying large balances. Maxing out your credit accounts can wreak havoc on your credit score. According to Craig Watts of Fair Isaac, lower credit usage indicates that you are a better risk.

3. Closing credit cards. This may come as a surprise to some, but closing extra credit card accounts can actually hurt your credit rating. Since the age of your credit accounts figures into your credit score, closing an older account can lower the average age of your accounts, thereby hurting your score.

4. Too many in-store cards. While you might be tempted to sign up for a store credit card just to get the 10% discount that they’re offering, keep in mind that doing so could hurt your credit score if you do it too often. That’s right, opening multiple accounts in a short period of time can

5. Fines that add up. As I’ve written about before, little things like library fines, parking tickets, and traffic fines are starting to find their way onto credit reports. This is actually something that I need to check into. I’ve had library fines in the past, and it’s quite possible that I had a little something on my record when we moved — I really need to give them a call and settle up (if necessary) before I forget about it. It’s just not worth the risk.

[Source: CNN/Money]

Published on July 14th, 2006 - 3 Comments
Filed under: Credit Cards

About the author: is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

Comments (scroll down to add your own):

  1. I actually had a library fine on my credit report a few years back. When I went to take care of it, the actual fine was less than $10.

    Comment by Anonymous — Aug 19th 2006 @ 10:47 pm
  2. If you have been brainwashed into thinking you need a credit score, please see He will teach you the ways of no Debt Lovers (FICO) score.

    Comment by Anonymous — Jan 15th 2007 @ 10:48 am

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