Welcome to the Fiscal Education Hub , this section of our emails is where you will find financial and funding education , tips and fundamentals.
7 WAYS YOU CAN HARM YOUR CREDIT SCORE
1. WAITING UNTIL THE DUE DATE TO MAKE A PAYMENT
Most credit card issuers report balances around the time the billing cycle closes, before payments are usually made and credited.
2. CLOSING A CREDIT CARD
Closing a account affects scores because you lose the available credit on that account and history, if it is an older account. The outstanding debt remains the same that can cause credit utilization ratio to jump up and credit scores to drop. However, do not leave accounts open that cost money and you don't use.
3. APPLYING FOR STORE CREDIT ACCOUNTS TO GET A DISCOUNT ON A PURCHASE.
Every time you apply for a there’s a “hard inquiry” on your credit. One inquiry has little to no impact on your credit score. But if you have several in a timespan your credit can be affected. Also, if the card has interest and you don't pay the balance in full by closing date or you really saving money.
4. COSIGNING ON A LOAN 🏽
Cosigning a loan means that you are equally responsible! If the person you have co-signed with fails to make a payment It will reflect on your credit report.
5. PAYING OFF A LOAN
You would think paying off a loan, after paying it on time, would help your credit score soar even higher, but that's not the case. For installment loans like a loan or mortgage, there’s a status change from “active payment” to “paid". Your credit score might temporarily dip. Don’t worry, in a few months your score will stabilize and go up, thanks to having another account in good standing to your name.
6. NOT CHECKING YOUR CREDIT REPORT AND SCORE.
Sometimes a drop in your credit score can be due to an error on your credit report or even fraud. If you are unaware of any problems, a small issue can turn into a big headache over time.
7. AVOIDING CREDIT COMPLETELY
Truth be told, you have to use credit in order to build up a strong credit history. That doesn’t mean you have to go into debt. You can use credit responsibly. You’ll have a hard time accomplishing basic financial goals, renting an apartment, opening utility accounts and borrowing at an affordable rate if you ever need to.
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