3 Factors that Affect Your Credit Score

Keeping track of your credit by accessing your online account is a great way to make sure you are not running up your balance or checking for fraudulent charges. Using this online resource can also help you keep an eye on anything that is negatively impacting your credit score. Being aware of what can hurt your score can help you become a smart credit card user and help you improve your overall finances. Here are just a few critical aspects that can knock your score down:

Bankruptcy
On your credit report, you will be able to see all the negative marks including missed card payments and other delinquencies. Another major blemish to your credit is filing for bankruptcy, which is usually a last ditch financial measure for those that are unable to pay their debts. The most common forms filed by consumers are Chapter 7, 11 and 13 bankruptcy. A bankruptcy may stay on your credit report for up to ten years and alert potential lenders to the fact that you may not be responsible with debt.

Closing accounts
Even if you have paid off your credit card balance in full or have gotten it down to a manageable level, refrain from closing the account. This will raise your credit utilization rate, or the amount of credit you are using compared to your overall limit. Plus, if you have any delinquencies on this account, it will stay on your credit report for up to seven years regardless of whether or not it is currently open.

Tax lien
If you refuse to pay your taxes, you could see a tax lien on your credit report. This is a last ditch effort from a government entity to get you to pay your back taxes. To take care of a lien, you have to pay back the full amount you owe, get it dismissed in a bankruptcy court or come to some sort of a compromise with the tax authorities. Generally, a lien will also stay on your credit report for up to seven years, though under certain local and federal laws, it could remain there indefinitely. To make sure you are not in this boat, stay on top of your finances and check your city or state's laws about their regulations for liens.