Have you ever wondered how to wreck your credit score in the shortest amount of time possible? Wonder no more! Here are the quickest and easiest ways to tank your credit rating. Keep in mind, these tips are not for the faint of heart – if you’re looking to damage your credit, read on!
1. Don’t keep track of your credit score or credit history
Your credit score is a number that represents your creditworthiness – basically, how likely you are to repay a loan. Your credit history is a record of your past borrowing and repayment activity. Lenders use both your credit score and your credit history to determine whether or not to give you a loan, and if so, at what interest rate.
If you don’t keep track of your credit score or credit history, you’re more likely to make mistakes that will ruin your credit. For example, you might miss a payment or max out your credit card without realizing it. These kinds of mistakes can have a major negative impact on your credit score, making it harder for you to get approved for loans in the future. Furthermore, if you’re not aware of your past borrowing and repayment activity, you may be more likely to repeat mistakes that led to bad credit in the first place.
Therefore, it’s important to stay on top of your credit score and credit history. You can get free copies of your credit report from each of the three major credit bureaus every year, so there’s no excuse not to know what’s on your report. Checking your credit report regularly will help you catch any errors or potential problems early on, so you can take steps to fix them before they do serious damage to your credit. Additionally, knowing where you stand with respect to your credit score will help you make smart financial decisions that will improve your chances of maintaining good credit in the long run.
2. Max out your credit cards
Credit is important. It’s what allows you to buy a car or a house, and it’s also how lenders determine whether you’re a good risk for a loan. That’s why it’s so important to maintain a good credit score. And one of the best ways to do that is to avoid maxing out your credit cards.
When you max out your credit cards, it shows lenders that you’re not good at managing your finances. It also raises your debt-to-credit ratio, which is one of the biggest factors in determining your credit score. In short, maxing out your credit cards is one of the quickest and most surefire ways to ruin your credit score. So if you want to keep your credit in good standing, make sure you don’t max out your cards.
3. Don’t make on-time credit card payments
One of the fastest ways to ruin your credit is by missing payments on your credit card. When you miss a payment, your creditor will report the late payment to the credit bureaus. This will cause your credit score to drop, making it harder to get approved for future loans. If you’re having trouble making ends meet, there are other options available besides missing a payment. You can contact your creditor and ask for a hardship program or an extension on your due date. Both of these options will allow you to make smaller payments until you’re back on track. Missing a payment should always be a last resort.
4. Don’t pay off your debts
There’s no question that debt can be a major burden. It can be tough to keep up with monthly payments, and the interest charges can add up quickly. However, failing to make payments on your debts is one of the quickest ways to ruin your credit. When you don’t pay your bills, it has a negative impact on your credit score. And if your score falls too low, it can be difficult to get approved for loans or lines of credit in the future. So if you’re struggling to keep up with your debts, it’s important to work with your creditors to find a payment plan that you can afford. Otherwise, you could end up doing serious damage to your credit.
5. Apply for too many credit cards at once
Most people understand that their credit score is important. A high score can lead to better interest rates on loans and lower insurance premiums, while a low score can make it difficult to get approved for credit at all. However, what many people don’t realize is that there are certain activities that can significantly damage their credit score in a short period of time. One of the quickest ways to ruin your credit is by applying for too many credit cards at once.
When you apply for a new credit card, the issuer will typically do a hard inquiry on your credit report. This type of inquiry can lower your score by a few points, and multiple inquiries can have an even bigger impact. Additionally, each time you apply for a new card, you’re increasing your chance of being denied. Too many denials can also damage your score. So if you’re looking to build or improve your credit, it’s best to avoid applying for multiple cards at once.
6. Max out your credit cards
If you’re looking to ruin your credit score, maxing out your credit cards is a great way to do it. Credit utilization is one of the biggest factors in your credit score, and by maxing out your cards, you’re essentially telling creditors that you’re not good at managing your money. This can lead to higher interest rates, lower credit limits, and even getting declined for new lines of credit. So if you’re trying to ruin your credit, maxing out your cards is a surefire way to do it.
7. Close old credit card accounts
One of the worst things you can do for your credit score is to close old credit card accounts. When you close an account, it can stay on your credit report for up to 10 years and will ding your score in the meantime. Additionally, closing an account will lower your overall credit limit, which can make it appear that you’re using a higher percentage of your available credit – another factor that hurts your score. So if you’re trying to improve your credit, keep those old accounts open and active. It’s worth it in the long run!
Your credit score is a number that indicates how likely you are to repay a loan. It is based on your credit history, which is a record of your past borrowing and repayment behavior. The better your credit history, the higher your credit score will be. A low credit score can make it difficult to get approved for a loan, and you may end up paying higher interest rates if you are approved.
The fastest ways to ruin your credit are by not paying your bills on time, carrying too much debt, and opening too many new accounts at once. If you want to keep your credit in good shape, make sure you always pay your bills on time, don’t borrow more than you can afford to pay back, and only open a few new accounts at a time. By following these simple tips, you can avoid ruining your credit and maintain a healthy score that will help you when it comes time to borrow money or apply for a loan.
On the other hand, if you’re wondering what are your credit repair options – don’t fret! With a little time and effort, you can raise your credit. There are so many easy ways to boost your credit that you’ll be on the right track in no time!
Erika Finn, founder of Stacking Acorns, is an attorney who graduated from law school at University of California, Berkeley. She was a member and editor of the California Law Review and won the Prosser Prize for Legal Accounting. She holds a Master’s Degree from the University of Southern California (USC) and a Bachelor’s degree from Indiana University- Bloomington. Stacking Acorns is a personal finance website for women by women. We help mid-life women achieve financial freedom through real estate investing and other streams of passive income.
