Having a bad credit score can hurt you in every area of your life – not just in the ability to take out loans.
Employers in many circumstances can run credit checks, and a bad credit score might be the deciding factor in giving the job you applied for, to an equally well-qualified candidate with a better credit score.
If you want to rent a home, or a car, or even buy a new cell phone – you guessed it – a bad credit score can hurt you.
So what kinds of things will hurt your credit score?
Maxing out your credit cards – try very, very hard not to borrow or charge more than 50 percent of the amount that you are allowed to borrow. If you go above that, it will hurt your credit score. Do not charge your cards to the limit.
Late payments – late payments are devastating to your credit. Payment history makes up about 35 percent of your credit score. To make sure that you don’t skip a payment, go on autopilot – arrange to have all of your payments withdrawn automatically form your bank account. That way you will never have to worry that the check is in the mail.
Applying for a bunch of credit cards or for any loans.
Closing down old credit card accounts. Lenders want to see a long payment history. The longer that you have had a credit card account open and have made on-time payments, the more this helps your credit score.
Having a tax lien placed against you
Declaring Bankruptcy
So what is a good credit score?
Anything above 700 is considered excellent.
600 to 690s – okay, but not ideal. These days, with tightening credit standards – may not be enough to get you approved for a house, and certainly not for the best rates.
Below 600 – you’re considered a high credit risk.
Below 550 – really, really bad.
