Economics & Finance infographics

What Hurts Your Credit Score?

What is a credit score?

Your credit score is a three digit number that summarizes your credit risk. It’s based on your credit report, which is a record of your credit history. Your score is calculated using factors such as payment history, amount of debt, and age of credit accounts. It’s based on your credit history, and it ranges from 300 (poor) to 850 (excellent). Thus, the higher your score, the less risk you pose to lenders.

How can you hurt your credit score?

A low score can hurt your ability to get a loan, rent an apartment, or get a job. It can also increase the cost of insurance premiums and affect your ability to get a cell phone contract.

Missing a payment or making late payments can hurt your score. So can maxing out your credit cards or applying for too many loans. Bankruptcy, foreclosure, and tax liens can also damage your score.

If you want to improve your credit score, make sure you always pay your bills on time, keep your debt levels low, and don’t apply for too many loans at once.

The most common ways to hurt your credit score

  • Late payments
  • Maxing out your credit limit
  • Closing old accounts
  • Applying for too many cards
  • Legal judgements
  • Having a low credit score
  • High credit card balances

What can you do to improve your credit score?

There are several things you can do to improve your score, including paying your bills on time, maintaining a healthy mix of credit accounts, and using less than 30% of your available credit. You can also get a copy of your credit report for free once per year from each of the three major credit bureaus.

Conclusion: Credit scores are important, take steps to protect yours

As you can see, the importance of credit scores is pretty clear. If you want to know more about this topic and how your credit score is calculated, be sure to read Building a Brighter Financial Future with Financial History.

Your credit score is one of the most important numbers in your life. It can affect your ability to get a loan, a job, or rent an apartment.

Original infographic via freescore.com in 2011, content updated March 2022

Infographic about what hurts your credit score

Jessica Smith

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