5 Ways To Kill Your Credit

How you handle your credit is more critical than you may realize.

Your credit score, which ranges from 300 to 850, not only affects your ability to obtain a mortgage, car note, or personal loan, but it also affects the interest rate you pay. Any score above 700 is a sign of good financial health. To stay fit, avoid these five credit score ills:

Late payments: “Your payment history is about 35% of your credit score,” says Orlando-based financial adviser Kimberly R. Stewart, who has conducted workshops for the Smart Women Finish Rich® seminars. If your payment is 30 days late, it stays on your credit report for seven years.

High card balances: The more balances you owe compared to your total available credit, the lower your score. Lenders look favorably upon borrowers who maintain balances of 30% or less of their credit limit.

Closing credit accounts: “You won’t be able to build wealth without credit,” says financial expert Cheryl Broussard. A longer credit history increases your score. So, if you cancel a card with a 10-year history, you’re erasing positive credit history, which accounts for 15% of your credit score.

Multiple in-store cards: Stewart advises steering clear of too many department store cards. “It shows the lender that you don’t use credit wisely,” she says.

Unpaid fines and fees: These days, unpaid parking tickets and even library fines can appear on your credit report and will lower your score. Pay them promptly.

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