5 Ways to Mess Up Your Credit


In the words of Master P, “How you do that there?” Loan officers probably wonder something like that when they look at some credit scores! It’s not just lending; credit scores can now affect other areas of your life. From determining whether you get past a job interview to past the first date, credit scores are considered. Understanding how you received a certain credit score is important. For many people, the downfall began when they accepted numerous credit cards during college.

I understand this because credit cards were the going thing when I was a college student. I didn’t need one at all, but I accepted several credit card offers. It seemed like our peers were impressed with who had the most cards. Unfortunately, many of us did not consider our credit scores. Those immature decisions have had lasting effects on some of us. I’m sure most students didn’t realize that late/missed payments would stay on our credit reports for seven years, which created an uphill struggle for numerous graduates.

I believe financial literacy would have helped many of us avoid some of those mistakes. At the very least, it might have prevented some people from further messing up their credit scores. Many borrowers of color (not just college students) are negatively impacted by credit scores for various reasons. Do you want to be empowered to make better decisions? Learn the myths about credit scores and remember your credit mistakes to avoid repeating them. You might not be aware of how you got in the situation; so, I’ll give you some hints.

Here are 5 ways to mess up your credit:

  1. Paying your bills late (credit cards, student loans, etc.) can create the following domino effect of penalties: late fees, appears on your credit report, increase in interest rates, or decrease your credit score. A lot of people take this for granted, but the most important part of your credit score is your bill paying history.

  2. Having too many credit cards indicates that you are likely living above your means, and it raises a red flag. When your cards are maxed out, it is not a good look!

  3. Although you might be trying to help others, poor lending habits can harm you. Co-signing for someone, who does not pay the loan, lowers your credit score.

  4. It seems counterproductive, but closing older accounts has a negative impact on your credit score. It is recommended that you close newer credit accounts first because you want to give the appearance that you have a longer credit history. Short credit histories lower your scores.

  5. If foreclosing your home or other mortgaged property is unavoidable, it’s not the end of the world! However, you will have trouble buying certain things because a foreclosure remains active on your credit report for seven years (from the filing date).

Challenge: If you have messed up your credit, learn the myths about credit scores and acknowledge how you messed up. Then, take steps to ensure that you don’t make the same mistakes again.

Leave a Reply

Your email address will not be published. Required fields are marked *