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10 Things You Didn’t Know Could Hurt Your Good Credit

Credit Score, Paying Off Debt, Personal Finance
10 Things You Didn't Know Could Hurt Your Good Credit
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Having good credit may give you more opportunities, but it doesn’t make you invincible. There are all kinds of unexpected ways that your good credit score can go down in a heartbeat.

Here are 10 things you may not have known could hurt your credit score:

1. Just one late payment

You may have found the best credit card for good credit, but if you make even one payment more than 30 days late, your credit score may suffer. That’s when credit card issuers are likely to notify credit-reporting agencies of your delay, and that can drop your score.

2. Not paying ALL of your bills on time

It’s not just late payments on credit cards that can affect your credit. Late payments on utilities, rent, phone or loans can have a negative impact as well.

3. Applying for more credit

Every time you ask for credit — everything from applying for a mortgage to a store credit card — a hard credit inquiry is made on your account. Every hard inquiry affects your credit score, even when you don’t get approved.

4. Canceling your zero-balance credit cards

Even if you’ve paid off a credit card, hold onto it. Canceling a credit card can hurt your score two ways: It reduces your total credit amount, which can raise your credit utilization ratio. It also can shorten the age of your credit history.

5. Transferring balances to a single card

Carrying only one card around may be convenient, but transferring your balances to a single card may not be beneficial to your credit. Creating one high balance that approaches your credit limit sends your credit utilization way up, which will hurt your score.

6. Co-signing credit applications

Whenever you co-sign with your good credit to help out family or friends with less-than-perfect credit, you take on responsibility for their debt.  If they can’t pay, you’ll have to — or your good credit will suffer the consequences.

7. Not having enough credit diversity

Your credit score isn’t just made up of your history with one credit card. Having a mix of credit types — revolving and installment — can help your score.

8. Holding high credit card balances

If your balances are creeping up toward your credit limit, it can hurt your good credit. Try to keep your credit utilization ratio around 30% of your available credit — and even less is better.

9. Unemployment leading to missed payments

It’s a myth that unemployment claims will hurt your good credit, but not being able to pay your bills will. Talk to your creditors before you miss payments to try to alleviate potential effects on your accounts.

10. Ignoring your credit report

You can get free credit report information on demand from some personal finance websites that offer free credit scores (such as NerdWallet). Use that access to monitor for potential errors that could end up hurting your credit score. If you see something that doesn’t add up, you can request the in-depth reports you can get annually from the three credit reporting agencies: Experian, TransUnion and Equifax.

This article updated Feb. 22, 2017.