5 Ways To Kill Your Credit

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.