Your credit score influences many different aspects of your life, from where you can live to what type of job you can hold, so it is very important that you try to keep your credit score as high as possible. There are a number of ways available to improve a credit score, but there are many more ways that a credit score can be destroyed, which often causes years of anguish and takes large amounts of money to return the credit score to its previous heights. Here are some surefire ways to kill your credit score.
Late Payments
Late payments on your accounts are reported to the major credit monitoring bureaus to be included in the calculation of your credit score. Each late payment lowers your credit score by a significant amount and your credit history will reflect these late payments for seven to ten years. Missing payments on multiple accounts for multiple months can reduce your credit score by more than 100 points, an amount that can take years to gain back. Because credit card account information is easily obtained by the credit reporting bureaus, late payments on these accounts may affect your credit score more quickly than late payments made on other accounts.
Canceling Older Credit Accounts
The length of your credit history is an important factor when your credit score is being calculated, with a longer credit history resulting in a higher credit score. Canceling your older credit accounts can decrease the length of time listed in your credit history and skew the calculation of your credit score. Credit accounts that you have had for many years can be paid off but should be kept open to keep the length of time that you have had the account included in your credit score calculation.
Spending Your Entire Credit Limit
Maxing out your credit limit is another action that can harm your credit score significantly. The ratio of the amount of credit you have available to the amount of credit you are using at any given time is also an important part of the calculation for your credit score. If you are using all of the credit that you have available, you are more of a risk according to the credit score calculation and your credit score will go down. You can quickly increase your credit score again by paying down your credit balances and limiting your credit balances to less than 30% of the total amount of credit available.