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Suprising Ways to Hurt Your Credit

Posted on August 3, 2012 by Ray Williams (NMLS #216267).

We are always looking for ways to improve our credit scores, most of us don’t have A+ credit, we are either fighting to get our of the 500’s or staying stuck in the mid 600’s.  In helping your credit the best thing to do is to KNOW what negatively affects your credit to start.  We need to know more “what NOT to do”!

Here are few surprising ways to hurt your credit:

  •     Don’t CLOSE your credit card accounts.  Paying off your credit cards and closing them hurts you not helps you.  I know it sounds weird, but it’s true.  When you close a card, your credit limit drops, which increases your credit utilization (bad).  If that card is older than the your other cards, the average age of existing credit card accounts will also lower (bad).  These can be worse than an collection account and could draw the line for you between good and bad credit.
  • Not Paying library fines!  With local budgets striving to get by, community services are looking and needing ways to make money.  Libraries are now taking you to collections on outstanding library fines.  These collections can have devastating effects on your credit.
  • Unpaid parking or speeding tickets  ALL parking or speeding tickets, even if they are out of state!  There is no ignoring these, they will send you to collections very quickly, plus they will tack on penalties and fees and will report to all bureaus, just like unpaid library fines, this will be pretty painful to your credit score

These are just a few surprising things that will have a great impact on your credit scores.  There are definitely other quirky things.  The best thing to do is start being more aware of your credit scores, pulling your annual free credit report and double checking its accuracy.

The sad thing I see is people wanting to get pre-approved and then realizing after I pull their credit that they don’t qualify because of a collection they never knew about.  Or any of these above referenced items making a big impact that they were unaware of.

If you have any questions please don’t hesitate to give me a call or email me.  If you would like to complete an online loan application click here.

~Ray Williams

Branch Manager

Summit Mortgage Corporation

303-779-0591 ext. 101

rwilliams@summit-mortgage.com

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