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Your FICO score, or credit score, ranges from the lowest score of 300 to a perfect 850. Your score is determined based on factors including whether or not you pay your bills on time, how much debt you have as well as how long you have had a credit history.

No matter if you are a consumer that is very careful about managing and maintaining good credit, it is still very possible that you can jeopardize your positive credit faster than you can say 'late payment'.

For example, even though closing out credit card accounts that you don't use, or combining all of your outstanding debt to one card may seem like a good idea moves, in actuality, you may be destroying your credit rating.

Late payments
The simplest way to reduce your credit score is by not paying your bills on time, or by totally passing over a bill.

Being that your payment history determines about 35% of your credit score, neglecting to make the minimum required payment within 30 days of the due date could result in your score plunging.

Say for example suppose you have never missed a payment and have a credit score in the low 800s or high 700s. Missing the 30-day grace period, could result in your score dropping by 100 points or more!

As soon as you are delinquent for the firs time, you are categorized with a different class of consumers. Sure, you can make up the 100 points over time. However, it will take longer than it took for your score to go down. Get more info about the importance of paying credit card bills on time.

High card balances = low FICO score
You are certain to bring down your credit score when you max out your credit cards, push your accounts to their limits or even worse go over the limit.

A rule of thumb to follow is that you aim to maintain a balance on your credit accounts that is no more than 30% of the available credit lines. So, if you have a credit card with a $1000 limit, try to sustain a balance that is no more than $300. Learn more about smart credit card use.

Statistics show that you are a better credit risk and that you are able to exhibit self-control when you have a lower debt amount compared to your credit limit. Debt-to-income also plays a very important role in determining your credit.

If you are considering transferring credit card debt into one account, you may want to reconsider if your new balance if going to be near your credit limit. We suggest you read the section related to credit card balance transfer tips.

Closing credit cards
Do you have a bunch of credit cards that you do not use? Are you under the impression that if you close these accounts out that you will improve your credit score? This assumption is wrong!

Being that part of your score is determine on the amount of time certain lines of credit have been open, closing out a 15-year old credit card could take a chunk out of your credit score total. Think about are eliminate a strong reference to a positive credit history.

In addition, if you are seeking to reduce your debt by jumping from one low-interest rate offer to the next, closing cards along the way, you are going to considered a credit risk by any future potential lender.

Too many in-store cards
Store credit cards are very tempting. Most offer between 10 - 15 percent discount when you sign up. However, these card offers will likely work against your FICO score.

It does not matter if you pay these cards off quickly, establishing these types of accounts one-after-the-other will likely be considered abnormal credit behavior and ultimately result in a damaged credit score.

A $50 parking ticket and $20 library fine. So what, right? Don't dismiss these penalties so quickly.

Nowadays, it has become very common for municipal governments to turn any outstanding fines over to collection agencies. Collection agencies have the capability of trashing your credit rating if you you choose not to pay up. Not paying a debt with a collection agency can result in your credit rating dropping by 100 points or more!

Not paying these types of petty fines just does not make sense; especially when you consider the potential damage that can occur to your credit score and how much it would cost you in interest as a result of higher interest rates on a mortgage, car loan, or unsecured loan.



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