http://www.debts.org/index.php en info@debts.org Copyright 2008 2008-12-01T15:28:00+00:00 http://www.debts.org/11/index/10_credit_score_killers/ http://www.debts.org/11/index/10_credit_score_killers/#When:12:50:00Z Your credit score is your passport to a house, car or any other major purchase. A good credit score not only gets you the money you need but on the best terms, so knowing how to avoid damaging your credit rating is vitally important. To help you get the best loans, mortgages or credit cards, we have listed 10 things that cause havoc to your credit score. 1.  Late paymentsLate payment on loans or credit cards will account for about 35% of your credit score. Most people with a poor credit rating have consistently paid bills late or have been guilty of underpaying. Keeping your credit score in good shape is easy if you pay bills in full and on time. More.... 2. Missing paymentsSkipping credit card or loan repayments will detrimentally affect your credit rating and at the same time elevate your risk potential. Several missed credit card payments will have your account terminated (charged off) or your loan amount recalled in full, plus interest. If you are unable to make a payment always contact your lender in advance who will try to accommodate your situation as much as possible.3. Closed /‘Charged off’ accountsConsistently missing payments can lead to having your account ‘charged off’ or in other words, closed. A charged off account means you are no longer able to make any transactions from that account and that includes making purchases. Instead you will be asked to repay the balance of a loan in full, with interest. A ‘charged off’ account is reported to credit bureaus who in turn record the default in your file.4. Debt collectorsA third party company can be used to collect the debt you owe the lender. A debt collection agency may get involved prior to the account being closed or after depending on the lender. If a lender has recruited a debt collection agency to reclaim your debt, credit agencies will be informed that the lender have given up asking you for money. Unsurprisingly, this is another major culprit behind poor credit scores.5. Defaulting on a loanMissing repayments on a loan is a serious matter in any lender/borrower relationship and demonstrates an inability to maintain your part of an agreement.Defaults of this kind are reported to credit bureaus and are viewed very badly by any future lender. If you are unable to make the repayments, try asking your lender to adjust the amount or the term of the loan. 6. Filing bankruptcyBankruptcy does to your credit rating what a wrecking ball does to a dolls house. Bankruptcy is recorded on your credit history for 7-10 years making any kind of credit very difficult to obtain. Should you be considering bankruptcy as a debt solution, make sure you know the consequences and possible alternatives first by clicking here.7. Home foreclosureLate or missed mortgage repayments can lead to your lender foreclosing on the loan. A history of foreclosure will make any future mortgage applications extremely difficult. Visit How to Avoid Foreclosure for advice on how to keep your home. 8. Court judgment A lender going through the courts in order to recoup your debt will significantly damage your credit file. If you have been served with a judgment it is important to pay it immediately - lenders will always view a paid judgment better than an unpaid judgement.9. High credit card balancesA vitally important aspect to credit scoring is your current level of debt, measured by credit utilization. High credit card balances relative to your credit limit will increase your credit utilization and decreases your credit score. For example:if your credit limit = $2000, debt = $1,000, Your credit utilization = 50%10. ‘Maxed’ credit cardsSpending the full amount of your credit card limit, or worse exceeding it, will give you a negative credit utilization score. Your credit utilizations score determines your eligibility for future credit but the good news is you can maintain a healthy score by keeping track of you credit card spending. Make yourself at home in our Forum and find out what everyone else in America thinks about credit scores. There is also our up-to-date News section for all the latest on personal finance. If you need help finding a provider or would like to review a company, please don’t go without checking out our A-Z directory. 10 Credit Score Killers 2008-07-15T12:50:00+00:00