Throughout your financial life your credit score is a very important number, and is often the deciding factor on whether or not you are approved for a new credit card, loan, or mortgage.
Following on from our previous guides on how to improve and build a strong credit score, here’s a run down of 10 financial decisions you could make that would end up hurting your overall credit rating.
1. Not paying your bills
Not paying or completely ignoring your credit card bills is a quick and easy way to ruin your credit rating.
2. Paying your bills late
What lenders look for when deciding to approve a new request for credit, is the applicants ability to pay back the debt consistently and on time. By regularly paying your bills late or overdue you’ll quickly begin to hurt your credit rating.
3. Defaulting on a loan
By not making regular payments towards your loan or credit cards you will receive a default notice. Default notices are listed on your credit report and will have a negative effect on your credit score and therefore make it harder for you to get credit in the future.
4. Having credit accounts sent to collections
Many creditors often use the services of third-party debt collectors to recover payments that have been unpaid. A collection status on your account shows that the creditor have themselves given up chasing the payment and have instead hired someone else to reclaim the debt.
5. Having your home repossessed
If you get behind on your mortgage payments your lender will seek to repossess your home. In turn, the late payments on your mortgage will have a negative impact on your credit score and make it harder in the future for you to be approved for a mortgage loan.
