Wherever you go, your credit history follows. And if it’s not looking good, then banks will use that as an excuse to deny your loan request or refuse to give you a mortgage. That could put a damper on your plans and slow down your financial progress!
The only way to correct your credit score is by taking control of your credit transactions. The credit experts at Trifecta Credit Solutions in Harrisburg, PA, alert you about five actions that can hurt your credit score.
1) Delayed Payments
Non-payment of credit card bills and loan payments has severe consequences for your credit score. The faster you pay those cards off, the better your credit report and score are. Not paying back loans on time and missing deadlines is detrimental to your credit score. You should set up reminders to remember the due dates for your credit card and loan payments.
2) Not Checking the Credit Reports
Your credit report is a testament to your financial credibility. It records all your loans and credit transactions. The report is significant because it shows how trustworthy you are with your financial commitments.
If you don’t check your credit reports, you’ll never know whether they are accurate or not. You can dispute any inaccurate information on the report and even have it removed by contacting the credit bureau.
3) Frequent Shopping for New Loans or Credit
Getting a new loan without settling the previous one is detrimental to your credit score. It will show the lenders that you’re not responsibly managing your finances, and you can’t be trusted with a new loan or credit card, even if it’s to improve your financial situation.
The lenders may also think you took out loans from multiple sources without settling them, which shows desperation and lack of trustworthiness.
4) Having a High Debt-to-Credit Utilization Ratio
For credit cards, it’s suggested to keep your debt-to-credit utilization ratio under 30%. Opening new accounts to reduce the debt-to-credit ratio is not a great idea. It’s better not to open any new accounts or close unused ones unless necessary because it may negatively impact your credit score. You can also ask the creditors for a lower interest rate so that you’ll be able to pay off more of your balance every month and avoid a high debt-to-credit ratio in the future.
5) Stopping Credit Activities for a Prolonged Duration
Having no credit activity can also be a problem. It’s essential to keep your records updated until you’ve achieved the desired result that you’re aiming for. Lenders will consider your credit account inactive if it hasn’t been updated for six months or more. You should also keep in mind that closing old credit card accounts will not be helpful for your score either because creditors are likely to consider you too risky if you close all of them at once.
Signing up for credit score monitoring and repair in Harrisburg, PA, can help you get your credit score in order. Trifecta Credit Solutions is the premier credit repair agency in the region that allows companies and individuals to fix their credit. We also open a world of opportunities for aspiring business owners with our funding programs. Get a free consultation from our team now!