10 Bad Habits That Harm Your Credit Score
Understanding exactly what is hurting your credit score can be difficult. The truth is that even seemingly small things can have a profound effect on your score.
FICO credit scores are the most widely used scores by lenders and typically range from 300 to 850. This score is calculated from information in your credit report — including whether you’ve paid accounts on time, how much you owe, how long you’ve had credit, what types of credit you have and how many new accounts you have. Although there are five main factors used to figure out your credit score, there are countless ways to screw it up.
“There’s a lot of things you could be doing wrong,” said credit coach, Jeanne Kelly, with ReadyForGoodCredit.com. “Most of the time, the people who come to me don’t even realize what they’ve done wrong.”
Whether you want to increase your credit score or repair credit issues of the past, knowing what can trip you up can help ensure you don’t hurt your credit score. Here are 10 bad habits to be aware of.
1. You Never Check Your Credit Report
It is super easy to forget to check your credit score or be too worried to do it. Some say that ignorance is bliss. Unfortunately for them, that blissful ignorance will come to an end the day they want to buy their first home or car or rent an apartment.
Trending Now: 7 Myths About Credit Scores That Most People Believe
Read Next: This One Low-Effort Money Move Could Change Your Finances in 2026
How to avoid it: This is one of the biggest mistakes you can make while also being the easiest to avoid. Checking your credit report will alert you if there is fraud linked to your name, show you your credit score and let you know if anything else needs to be remedied.
How to fix it: If you never check your credit score, start today. Better yet, start now! It’s as easy as going to CreditReport.com.
2. You Pay Your Bills Late
Your payment history has a major impact on your credit score. U.S. News & World Report estimated that a single late payment can lower a credit score by 100 points or more. However, borrowers might be able to mitigate the damage, assuming they act fast. While missing a payment by just a few days likely won’t put your scores at risk, paying bills 30 or more days late can have a serious effect on your credit.
How to avoid it: Do whatever is necessary to avoid being late on payments. If you are forgetful, set up reminders on your phone or computer. If you spend too much, tighten your belt so you’ll have the cash to make your payment.
How to fix it: If you paid a bill late, contact your lender to get its policy on reporting late payments. Unfortunately, if the lender has already reported the late payment, you probably won’t be able to get it removed from your credit report. You’ll just have to make sure all future payments are made on time.
3. You Have Too Many Credit Cards
Keeping too many credit cards open at one time can be problematic, even if you pay each of them off monthly.
“Having too many cards can negatively impact both your credit score and your ability to borrow money,” said Julie Pukas, the former head of commercial product integration at TD Bank. Even if you don’t use all your available credit, lenders might wonder what would happen if you did max out your cards.
How to avoid it: “Having three to five credit cards is usually not a problem,” Pukas said. “But if you find your credit card balances are increasing, that’s a danger signal.” She advised limiting the amount of available credit you have at any one time.
How to fix it: If your ratio gets too high, consider closing one of your newer credit accounts to keep your utilization ratio low and your credit history long.
4. You Carry High Balances on Your Credit Cards
After payment history, the amount you owe is the second-most-important factor in your credit score, according to myFICO, the consumer division of FICO. Owing money doesn’t necessarily lower your score, but using a high percentage of your available credit can.
Remember that a high credit utilization ratio can hurt your credit score and make lenders think you’re a high-risk borrower. Consumers with the best credit scores use 10% or less of their available credit, Kelly said.
How to avoid it: “There is no absolute ‘right’ answer to how much of your credit limit you should be utilizing,” Pukas said. “What’s more important to note is that, if you’re carrying balances on credit cards that exceed 50% of the available credit, then you’re hurting your credit score.”
How to fix it: “Strive to get your total credit utilization under 50% first and then keep going,” Pukas said. “This is one of the fastest ways to increase your credit score.”
5. You Don’t Have Any Credit Cards
Lenders like to see a long history of responsible credit use, and if you don’t have a card, you might not have much information to show. Although it seems counterintuitive, not having any credit cards can actually hurt your credit score as much as having too many.
You might be cheering if you’ve paid off your mortgage or other loans and buy things only with cash now. But if you apply for a home loan, you might find that you can’t get a loan because you’ve stopped using credit, Kelly said. If you think you’ll be applying for credit at any point in the future, you need to continue using credit to show recent activity on your credit report.
How to avoid it: If you don’t want to open your own credit card account, consider asking a friend or family member to add you as an authorized user. You won’t have to use the card for it to benefit your credit score — you’ll simply piggyback off the good credit habits of someone else. Having a credit card can benefit your credit, Kelly said, because your score is based, in part, on how many types of credit you have and how well you manage those accounts.
How to fix it: Becoming an authorized user on someone else’s card can also help you repair credit mistakes. Just make sure the person who adds you to a credit account is a responsible borrower. After all, their bad borrowing behavior can also show up on your credit report.
6. You Close Old or Inactive Credit Cards
Although it’s smart to limit the number of credit cards you have at any given time, Pukas noted that closing old or inactive cards can come back to haunt your credit score. “The length of your credit history affects 15% of your score,” she said. “This is why it’s important not to close credit card accounts that you have had for years.”
How to avoid it: Strive to keep older credit cards active by using them sparingly — once every few months — and paying off the balances on time.
How to fix it: If you don’t trust yourself not to rack up debt on those cards, “consider canceling newer accounts rather than old ones, so that the length of your credit history is not impacted,” Pukas said.
7. You Ask for a Higher Credit Limit
Even though your credit card issuer checked your credit when you applied for your card, it will likely check it again if you ask for a higher credit limit. This could be reported as a credit inquiry, which could affect your score, said Gerri Detweiler, a credit expert and former education director for Nav, which helps business owners manage their credit.
How to avoid it: If at all possible, try to spend well within your current credit limit. That way, you won’t put your credit at risk.
How to fix it: This doesn’t mean you shouldn’t ask for a higher limit — especially if you’re responsible with credit and don’t plan to charge your card to the max. But you should think twice about doing so before applying for a mortgage or other loan.
8. You Consolidate Debt Onto One Card
If you owe money on several credit cards, you might be tempted to consolidate debt by transferring all the balances to one new card. But that can be a mistake. Not only can this lower the average age of your credit history, especially if you choose to close out the other cards, but it can also increase your debt-to-credit ratio.
How to avoid it: To keep your score from dropping, make sure the debt you consolidate doesn’t exceed 50% of the available credit on the new card.
How to fix it: Charge purchases to a few different credit cards and keep the debt-to-credit ratios of each below roughly 20%. According to the credit reporting agency Experian, individuals with consolidated debt might want to consult a nonprofit credit counseling company about participating in a debt management plan.
9. You Co-Sign on Debt
Co-signing for family or friends on their credit cards, car loans, residential leases and cellphone plans can be a quick way to ruin strong credit scores, said Ian Atkins, former general manager at Fit Small Business.
“This can impact you negatively in two ways,” Atkins said. “First, that debt obligation can immediately show up on your credit report, and the higher debt load can impact your credit score. Second, if your friend or family member doesn’t make their payments, those missed payments will show up on your credit report. If the account eventually goes to collections, that too will show up on your credit report.”
How to avoid it: “You should be very careful when co-signing for friends or family,” said Atkins. If you do co-sign, make sure you can cover the monthly payments if necessary, he said. Also, closely monitor the account to make sure no missed payments occur.
How to fix it: If you co-signed on another borrower’s debt and it’s having a negative impact on your credit, try to get the other person to refinance the debt in their name only. If that’s not an option, you might need to suck it up and take over the payments. It’s a painful lesson, but you won’t soon forget why, in most cases, you should never co-sign on debt.
10. You Let Debt Go to Collections
If you miss several payments, your debt could be turned over to a collection agency. You might even have a debt in collection you’re unaware of, such as an old utility bill that wasn’t paid when you moved. If that collection account is reported, your credit score could tumble.
“I have seen it drop in a credit score 75 points for one collection,” Kelly said. A collection account will stay on your report for seven years, even if you pay it off.
How to avoid it: Make payments on time, or reach out to the debt-holders for repayment assistance.
How to fix it: If you do get a letter from a collection agency for a debt you owe, try to pay what you owe as soon as possible so that it’s less likely to be reported. And check your credit report to make sure you don’t have any debts in collection that need to be paid.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
More From MoneyLion:
