A good credit score can help you do so many things - apply for a home loan, purchase a car, have a credit card for emergency situations or to cover the cost of travel. A bad credit score can negatively affect your life, from making it hard to purchase a home or vehicle or apply for credit in emergencies. You might not be aware of how much you could be hurting your credit score.
Some Ways You Might be Hurting your Credit
- Not paying your bills on time: You might be surprised by which unpaid bills get reported to a credit agency. Some bills might include hospital bills, utility bills, school loans, and sometimes even rent.
- Being unemployed: When you file for unemployment, the credit agencies don't necessarily know that you are unemployed. What they do know is that you have a sudden drop in income which will cause your credit score to plummet.
- Applying for too much credit at once: Let's say you apply for a credit card. You need a car for your new job, so you take out a loan for one. Then you try to apply for a mortgage, but are denied because your credit score is too low. What happened? Applying for multiple lines of credit in a short time makes you seem risky to a credit agency, so they lower your score.
- Paying off your debt: Paying off your debt is a good thing. However, you might be surprised how paying off your bills could lower your credit score, at least in the short term. When you have less credit available, it looks bad to the credit agencies, even if it is the right thing for your wallet.
If you are worried about your credit score affecting your ability to own a home, call Midland Mortgage. We have many loan programs for a variety of situations.