Learn 4 Surprising Things That Damage Your Credit
We all know that paying our bills late can damage our credit score. And most of us know that having too much debt is a challenge, too. However, there are some seemingly harmless things can harm your credit as well.
Here are some surprising things that damage your credit:
- Getting the wrong type of credit. Obtaining your financing from the source of your purchase is generally frowned upon. Furniture stores, car dealerships, and more are common sources of this ‘second class’ credit. They’re viewed as credit for those that don’t have options.
- It doesn’t damage your credit score for this reason, but those reviewing your credit history are likely to hold it against you.
- It does damage your credit score for this reason: These types of loans have a credit limit that matches the amount of your purchase. This means your credit is maxed out on that account. We’ll cover why that’s an issue next.
- Your utilization ratio is too high. A significant portion of your credit score is determined by how much of your available credit you’re using. For example, if your credit card has a credit limit of $2,000 and your balance is $500, then you’re utilizing 25% of your credit on that account.
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