Things That Can Ruin Your Credit Score

By: Joshua Campbell

Things That Can Ruin Your Credit Score

Tags: credit score, real estate advice, real estate tips, bad credit score, ruin your credit score, improve your credit score, hard inquiries,

Many people are not aware that having a poor credit score can impact many aspects of your life. Credit scoring is used by banks, insurers, landlords, employers, and utility companies to evaluate your credit behaviour, patterns, and assess your worthiness of receiving financial credit.
 
When it comes to the real estate industry, having a good credit score is extremely important. If you are planning to buy a property or if you have already bought a home, you should be aware of the different things that can lower your credit score. Below are just a few examples.
 
Errors
 
Errors are a big issue that can cause point loss. Errors are not caused by you but from mistakes or from an intruder. A few common errors to watch out for are: wrong mailing address, incorrect SIN number, identity theft warnings, late payments, unauthorized report inquiries and identity fraud credit. Make sure to keep a close eye on your accounts and contact your bank if you notice an error.  
 
Hard Inquiries

A hard inquiry occurs when a creditor checks your credit before giving you a loan. Every time you have a hard report pulled it can potentially drop your credit score which can result in you paying higher interest rates on a loan. For example, if you apply for several credit cards a hard inquiry must be made each time. Each time dropping your credit score lower. If you just want to check what your credit score is that would be considered a soft inquiry. Soft inquiries do not affect your credit scores.
 
Bill Payment History

As this makes up 35% of your credit score, this is something you need to be mindful of to ensure you make your payments on time each month.
 
Debt Settlement

Settling a debt with a creditor for less than you originally owed can ding your score. 
 
Maxing Out A Credit Card

Aim to keep your credit card balance relative to your overall available credit. Maxing out your card can cause your score to drop.
 
Applying For Too Many Credit Cards

Applying for several credit cards over a short amount of time can make it appear as if you are desperate to accumulate credit.
 
Not Having Any Debt

Despite what many may think, having no debt isn’t great for your credit score! Not having a credit history in your file for a bank to evaluate can make it difficult for you. They will see you as more of a risk.
 
Being An Authorized User On Someone’s “Bad” Account

When your name is on someone else’s account, what they do impacts you. Keep that in mind before agreeing to add your name to someone with poor credit.
 
Changing Jobs Frequently

Constantly changing jobs can decrease your score. Staying at one job for a longer duration demonstrates job security and deems you less risky.
 
Bankruptcy

Declaring bankruptcy causes the most harm to your credit score and can stay on your report for up to ten years.
 
If you need more advice about your credit score or how to improve it so you can purchase your dream contact me today. I will be happy to put you in touch with my preferred people for this type of job.

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JOSHUA CAMPBELL (@knowledgebrkr)
Real Estate Broker
Coldwell Banker The Real Estate Centre, Brokerage
joshua@knowledgebroker.ca
249 Avenue Road • Newmarket, ON L3Y 1N8
289.231.0001

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