3 Ways You’re Hurting Your Credit Score

Repairing your credit score before you meet with a mortgage lender takes some time. Tarnishing it, though, can happen in a matter of seconds. Maintaining a good credit score is important because it will not only help you apply for loans, but it can impact your chances of getting a job or a car.

With a quick swipe of your credit card, you could see your score drop before you have time to blink. This does not mean you have to be fearful of using your card; in fact, you should continue to use it periodically. But you should be mindful of how you use your credit card. These are a few ways you may be hurting your credit score:

Using up all of your balance
A credit card limit is called that for a reason. Some consumers may think that they are allowed to spend up to the maximum of their credit limit, but doing so will send you into debt and your credit score will soon tumble. Overspending will cause you to raise your credit utilization ratio – the percentage of your balance compared to your limit. It is best to keep this number under 20 percent.

Missing payment due dates
Keeping track of your purchases and credit history will be beneficial because it will alert you to your spending habits and when your credit card payments are due. It is vital to your credit score health to make these payments on time. If you fail to meet this deadline, you will incur a late charge and your score will be affected. Being punctual is important because if lenders see that you are remaining on top of these payments, they will trust you when considering approving you for a mortgage or another type of loan.

Not using your credit card
You may assume that if you don't use your credit card, you won't have to worry about running up your balance. Although this theory is technically true, you are actually doing more harm than good with this mentality. In order to build up your credit, you have to use your credit card. You don't have to make expensive purchases for this to happen, but if you buy a small item once a week, you will be building up credit and stopping yourself from overspending.