Credit Scores are a funny thing. They can be affected by the smallest thing and you may not even know you are hurting it. Here are five things to avoid which can have an effect on your score.
Opening Too Many New Accounts
Having a lot of new accounts on your credit has a negative effect on your score. When you open up new lines of credit, this lowers your average account age. Typically, the higher the average account age, the better your score tends to be. If you keep opening up new accounts, your average will go down and this can have a greater effect on your score than not having a lot of credit history in the first place.
Closing Unsused And Old Credit Card Accounts
If you are looking to close old accounts in hope that this will help your credit score, don’t. Having accounts that you have had for years greatly helps your score. You are better off leaving them open and just not using them. Put the card in a draw and don’t every use the account.
Signing Up For New Credit Cards To Have More Credit Accounts
People think that just by having more accounts will help your score. However, this can hurt you. If you have too many accounts open, that can have an effect on your score. You want to have a good balace of different types of credit such as home loans, car loans, and unsecured loans like credit cards.
Taking Too Long To Shop For A Loan
The length of time that you take to shop for a loan will have an effect on your score. It is good to shop around to find the best rates for a loan but don’t take too long. It is good to try and finalize a loan within a couple weeks of when you first start to compare rates. Waiting any longer can have a negative effect on your score.
Signing Up For Store Credit Cards
When you are shopping, it is always tempting to signup for that store credit cards so you can get that nice little discount at the register. By signing up for these cards, you can lower your score if you do it too often. One way your credit is affected is by the number of times your credit report is requested. If you have too many credit requests, it will make you look desparate for credit and have a negative effect on your score.