Many things can hurt your credit score, including not paying your mortgage bill or racking up lots of credit card debt. But there are also a handful of events that could negatively affect your credit score — and do so very quickly — that you may not know about.
Here are five unexpected ways you can hurt your credit score overnight and a few tips on how to raise your score.
1. Transferring too many credit card balances
It can sometimes be a good idea to transfer credit card balances from multiple cards with high interest rates to one credit card with a low promotional interest rate (also known as a balance transfer credit card). Doing so can help you pay off your credit card debt faster by putting more money toward the principal balance, instead of the interest.
But if you habitually open new cards and transfer balances too often, it can hurt your credit score. Additionally, if a new card significantly lowers the average age of all of your accounts, it could cause your score to drop temporarily, according to Experian.
2. Making a late payment
Missing a single credit card payment may not seem like a big deal, but it is to the credit reporting agencies. On-time payments are the most important part of your credit history, accounting for 35% of your total FICO® Score.
So, even one missed payment could severely dent your score. The good news is that creditors may only report your payment if it's 30 past due, according to Experian. This is why it's essential to make any late payments as soon as possible, so you can avoid having a late payment recorded on your credit report.
3. Applying for credit
Some consumers may find that their credit score has dropped when they apply for a credit card. When companies issue a hard pull of your credit report, it can cause your score to drop, though it may not fall by much.
Still, it's worth keeping this in mind when considering applying for credit, especially if you're trying to improve your credit score.
4. Cosigning a credit application
Cosigning on a loan is essentially like signing onto the loan yourself. If the original borrower can't make payments, you're responsible for the debt. As such, being a cosigner could potentially hurt your credit score, according to Equifax.
Your credit score may not necessarily drop just because you're a cosigner, but you should be aware that it can fall if there are any late payments on the account.
5. Canceling a credit card
Part of your credit score is based on your availability of credit and the length of your credit history. The longer you have had a credit account with a company, the better it can be for your credit score.
But if you close an account, even if you've always paid on time and have paid down the entire balance, it can hurt your score. That's why it's generally recommended to keep your oldest credit card accounts open, even if you don't use them regularly. Keeping old accounts open boosts your average credit account age and also maintains your available credit, helping to keep your total credit utilization in check.
Two simple ways to boost your score
While all of the above will ding your credit score in some way, there are two simple things you can do to improve your score right now: Pay your bills on time and use less of your available credit.
As I mentioned earlier, paying your bills on time has the biggest impact on your credit score. So, if you're currently late on any payments, try to get up to date as soon as possible. Your score may not improve overnight once you do this, but it will eventually increase significantly, especially if you have fair credit right now.
Secondly, how much you owe is a big determinant of your credit score, accounting for 30% of your FICO® Score. That's why paying down your credit card accounts is important if you want to boost your score. The less available credit you use, the more responsible you seem, raising your score.
Keeping these events in mind, and avoiding some (or ideally, all) of them, will help you to improve your credit score, or at least help maintain the score you already have.
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