11 Things You’re Doing That Could Be Hurting Your Credit Score

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Ignoring these habits could quietly erode your creditworthiness

Your credit score isn’t just a number; it’s a measure of your financial trustworthiness. Lenders, landlords, and even some employers use it to determine whether you’re a reliable candidate. While paying bills on time is critical, other seemingly minor actions can quietly undermine your credit score. From small oversights to poor financial habits, these mistakes can snowball, limiting your options, raising your interest rates, and potentially costing you thousands of dollars over time.

The good news is that understanding these common credit-damaging behaviors allows you to make smarter financial choices. Many of the habits that hurt your score are entirely avoidable with a little knowledge and planning.

Below are some actions that could be quietly harming your creditworthiness, along with practical steps to reverse the damage and safeguard your financial future. With a few adjustments, you can take control of your credit score and enjoy greater financial freedom.

Missing payment due dates consistently

Failing to pay your bills on time is one of the most significant ways to hurt your credit score. Payment history accounts for 35% of your FICO score, making it the single most influential factor. Even a single late payment can cause a sharp drop in your score, and repeated tardiness may result in creditors flagging your account as delinquent.

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Worse, these late payments stay on your credit report for up to seven years, limiting your ability to qualify for loans, credit cards, or favorable interest rates.

To stay on top of payments, set up automatic withdrawals for recurring bills, like credit cards, utilities, or car loans. If automation isn’t an option, use digital reminders or a budgeting app to track due dates. Remember, even if you’re facing financial challenges, making at least the minimum payment by the deadline protects your score. A proactive approach to timely payments not only preserves your credit but also builds trust with lenders, opening doors to future opportunities.

Carrying high credit card balances

Credit card balances that hover near your credit limit can quickly drag down your score. Known as credit utilization, this ratio—how much of your available credit you’re using—makes up 30% of your credit score. Lenders view high utilization as risky behavior, signaling you may be overextended financially. If left unchecked, this habit can cause your score to plummet, even if you make payments on time.

To lower your credit utilization, aim to keep your balances below 30% of your credit limit, with an ideal target of under 10%. Start by focusing on paying down high-interest cards first, then distribute spending more evenly across all your cards.

Another effective strategy is to make multiple payments throughout the billing cycle to reduce your reported balance before it’s sent to the credit bureaus. These small adjustments demonstrate responsible credit management and can lead to significant score improvements.

Closing old credit card accounts unnecessarily

Closing an old credit card may seem like a harmless way to declutter your finances, but it can actually hurt your credit score. When you close an account, you reduce your total available credit, which can increase your utilization ratio. Additionally, older accounts contribute to the length of your credit history, which accounts for 15% of your score. Closing a long-standing account could shorten your average credit age and negatively impact your score.

Before you decide to close a card, evaluate its role in your overall credit profile. If the card has no annual fee, consider keeping it open and using it for small, periodic purchases to maintain activity.

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However, if you must close an account, ensure it’s not your oldest or most frequently used card. Planning these decisions carefully minimizes potential score damage and helps you retain a strong credit history.

Applying for too many credit cards in a short time

Every time you apply for a credit card, the lender performs a hard inquiry on your credit report. While one or two inquiries have a minimal effect, multiple applications within a short period can significantly lower your score.

Hard inquiries remain on your credit report for two years, and lenders may interpret frequent applications as a sign of financial instability or desperation.

Instead of applying impulsively, research your options carefully to find the best credit card for your needs. Only apply for cards where you have a high likelihood of approval. Additionally, consider spacing out your applications to avoid multiple hard inquiries in a short timeframe.

These precautions not only protect your credit score but also ensure you’re making intentional financial decisions.

Ignoring your credit report for errors

Your credit report is a critical tool for monitoring your financial health, but errors can sneak in. Mistakes like inaccurate account balances, incorrect personal information, or fraudulent activity can unfairly damage your score. If left unchecked, these errors may impact your ability to secure loans, credit cards, or rental agreements.

You’re entitled to a free credit report annually from each of the three major credit bureaus—Equifax, Experian, and TransUnion. Review these reports carefully and dispute any inaccuracies with the bureau that issued the report.

Be prepared to provide documentation, such as bank statements or payment records, to support your case. Taking these steps protects your score and ensures your credit history accurately reflects your financial behavior.

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Making only minimum payments on credit cards

Paying only the minimum on your credit card bills might keep you in good standing with creditors, but it can harm your credit over time. High balances resulting from minimum payments increase your credit utilization ratio, which can lower your score. Moreover, interest charges add up, making it harder to pay off your debt.

To avoid this trap, aim to pay more than the minimum each month, even if you can’t pay the full balance. Prioritize paying down cards with the highest interest rates first to reduce your overall debt burden. Gradually increasing your payments over time not only boosts your credit score but also saves you money in interest charges.

Cosigning loans without understanding the risks

Cosigning a loan means you’re taking on equal responsibility for the debt, even if you’re not the primary borrower. If the borrower misses payments or defaults on the loan, it will reflect poorly on your credit report. Many people underestimate the risks of cosigning, only to face credit damage they didn’t anticipate.

Before cosigning, ensure the borrower has a stable financial situation and a reliable payment history. Set up regular check-ins to confirm payments are being made on time. If you’re unsure, think twice—protecting your credit score is just as important as helping someone else.

Letting accounts become inactive

Inactive credit accounts may seem like a non-issue, but credit card companies often close unused accounts, which can hurt your score. Closed accounts reduce your total available credit and shorten your credit history, both of which negatively affect your score.

To keep accounts active, use each card at least once every few months, even for small purchases. Pay off the balance immediately to avoid interest charges. This simple habit helps maintain your credit history and keeps your score intact.

Relying on credit for unnecessary purchases

Using credit for non-essential items can lead to debt accumulation and higher credit utilization, especially if you’re not paying off balances in full each month. Over time, this behavior can lower your score and make it harder to recover financially.

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Before making a purchase with a credit card, evaluate whether it’s a need or a want. Save for big-ticket items instead of financing them, and avoid impulse purchases altogether. Responsible credit use ensures you’re not jeopardizing your financial health for short-term gratification.

Canceling utility or phone contracts improperly

Unpaid balances on canceled accounts, like utility or phone contracts, can lead to collection accounts. These accounts stay on your credit report for seven years and significantly lower your score.

Always settle final balances when closing an account, and confirm with the provider that no additional fees or charges remain. If possible, pay off any early termination fees to avoid the account being sent to collections. Managing these details carefully protects your credit and prevents unnecessary headaches.

Conclusion

Your credit score is an essential part of your financial health, and protecting it requires consistent effort and smart decision-making. Avoiding these 11 habits will help you maintain a strong score, opening the door to better interest rates, loans, and financial opportunities. By taking control of your credit, you’re not just protecting a number—you’re safeguarding your future financial well-being. Take action today to make informed, intentional choices that will benefit you for years to come.

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