10 Things Destroying Your Credit

You probably have a general idea of what will hurt your credit, but not everything is weighted equally. There are some items that aren't just bad, they are REALLY bad.

The first step towards avoiding these credit killers is knowing what they are and just how much they can damage your credit. Let's take a look at these items in terms of their impact on your credit score beginning with mildly damaging and ending in disastrous.

Here's the countdown of the top 10 things destroying your credit (Ranked from Mild to Disastrous):

10. Clerical Mistakes - These typos just happen, and usually don't damage your credit. The misinformation could include a wrong address, employment history, etc.

9. Old Late Payments - The good news about older negative listings is that their impact lessens with age. They might not affect your credit at all, but if they do they're not as difficult to remove as other negative listings.

8. 30-60 Day Late Payments - One late payment that's not all that late might not do much damage, but if you have a bunch of these they could lower your score by 100 points or more in no time. If you're willing to negotiate payment with your creditor, you might be able to remove the listings through a "goodwill request." 

7. 90-120 Day Late Payments - Payments in this category are truly late, and consequently much more difficult to remove from your report.

6. Recent Late Payments - These items indicate that you are having trouble with your payments RIGHT NOW, telling creditors that getting you to pay could be a problem. Recent late payments thus do more damage to your score and are particularly bad if your record lists several at the same time. This indicates you could present an imminent financial liability.

5. Charge Off or Profit and Loss Write-off Accounts - A "charge off" is a "write off" for a creditor, indicating they have given up on getting paid, even though you still owe the debt. Charge offs are likely to be sold to a collection agency, and collection listings are one of the biggest credit killers (coming up . . .)

4. Foreclosures and Repossessions - These should be avoided at all costs because they will devastate your credit score. They are very hard to remove and can stay on your report for up to 10 years!

3. Collection Accounts - These can destroy your credit rating, and do it fast. That's the intention of the collection agencies who report these accounts - to get consumers to pay up. Don't be fooled into thinking that paying a collection account will make it go away - paid collection accounts are no better than unpaid ones (though they may be easier to dispute and remove).

2. Included in Bankruptcy Items - Included in Bankruptcy Items are not much better than the bankruptcy listing itself when it comes to damaging your credit score. These are the accounts that were included in the bankruptcy, and if you don't address them individually they will linger, verifying the bankruptcy even after the bankruptcy itself is removed.

And the biggest credit baddie (which should be no surprise by now) is . . .

1. Public Records/Bankruptcy - Nothing can single-handedly do more damage to your credit score than bankruptcy, but this category also includes tax liens and judgments. These will remain on your credit report for 7-10 years if you do nothing to have them removed, and will haunt you in your financial future long after you've recovered from the bankruptcy itself.

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