NEGATIVE ITEMS

What are some things that negatively affect your credit?

Late/Missed Payments

Always keep in mind that this one component makes up for more than a third of your credit score, so it is critical to make sure you pay your creditors on time.

High Credit Utilization

Maintaining high balances on your credit cards will most definitely put a dent in your score. It is ideal that you try to stay under a 20-30% utilization rate on credit accounts.

Inaccurate or Outdated information

If you’re serious about your credit, monitoring it is the best way to ensure that there is not any inaccurate or outdated information on your credit reports.

Excessive Debt

Too many credit accounts with high balances will not allow your score to reach its maximum levels.

Numerous credit inquiries

Too many inquiries can be an indication of higher risk. There is an exception to this rule. If you are rate shopping for a specific loan, as long as the inquiries are done close together, they will be treated as a single inquiry.

Tax Lien

Tax liens on your credit report gives creditors the impression that you cannot meet your debt obligations. This will have an effect on your score as well as the decision-making process that creditors use when determining whether or not to extend credit to you.

Bankruptcies

A bankruptcy will remain on your credit report for up to 10 years. However, as time passes it will have less and less impact on your score.

Collections

While a bankruptcy can haunt your credit for 10 years, collection accounts can remain on your credit report for as many as 7 years. However, just like a bankruptcy, the impact lessens over time.