I am asked almost every day, “What things affect my Credit Score the Worst?” It does not matter what your score is before the event. It only matters what your score is for the outcome. The higher your credit score the more that these events will affect the number and the lower the score the less it will affect your score.
The worst offender is a Bankruptcy. Bankruptcies will lower your score from the worst offender is a Bankruptcy. Bankruptcies will lower your score from 130 to 240 points right from the start. Depending how you monitor your report will depend on how much more damage other things report from the bankruptcy. The Bankruptcy alone will do 130 to 240 points but other items could do even worse so watch what is being reported.
Next on the list is a Foreclosure. If you can avoid a Foreclosure do so but if you cant avoid one then be prepared for it to affect your credit by 85 to 160 points. Unlike a bankruptcy, a foreclosure generally only affects the foreclosure listing.
If you have a collection account and settle the debt you will be facing the third item on our list. Debt Settlement affects your score from 45 to 125 points per account. So if you settle several of these accounts then you could have something that really damages your credit score. If you only have one account you can recover soon but several accounts will take you much further down the credit hole.
30 day late payments are #4 on the list of credit score offenders. One late payment can affect your score from 60 to 110 points and if you have several of them or have those for several months on a row, your credit score can really go down the tubes. That is why it is so important to make your payments on time even if it is for the minimum payment amount.
Lastly, maxing out your credit card will affect your credit score from 10 to 45 points per card. So if you have several cards and max them out you could be really affected by the damage the score will receive. So try not to use the complete balance on any card unless you have no other choice. Keeping your balance below 50% of the limit is better and keeping it around 30% of your limit is best for helping your credit score.
These 5 things can really hurt your credit score so watch out and avoid them if at all possible. That sounds like silly advice but making your payments on time and in full will be best for your financial future.
Mel Jensen is a retired Customer Service Manager with Ovation Credit Services.
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Tags: Credit Score, Score, Things Affect
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