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5 things that could hurt your credit score.

Establishing and building good credit is only half of the battle. Even if your score is in the positive range, it’s likely that you’ve received an email once or twice notifying you that your score has decreased. But your credit card doesn’t have a balance, so what gives? 

Paying off your balance at the end of the month and maintaining a low credit utilization rate are only two pieces of the elusive credit score battle. The following are five often overlooked factors that could negatively impact your score.   

Falling behind on bill payments. 

It is not enough to simply stay up to date on your credit card and other loan account payments. Failure to pay rent, cell phone or electricity bills on time can have a negative impact, especially if any of those account falls into delinquent status and are sent to collections. 

Cancelling a credit card. 

Finally paying off your debt and getting your credit card to a zero balance is one of the greatest feelings, but don’t pick up the scissors just yet. Cancelling a credit card or having a credit card account automatically closed because of inactivity can hurt your credit score as it will reduce your total credit amount and potentially shorten the age of your credit history. Instead of ignoring your credit card accounts altogether, learn how to properly use them to maintain good standing. 

Transferring balances to a single card.

Balance transfers can be a smart way to consolidate debt and save money, but make sure the card you’re transferring to has a large enough limit. If the new card has a balance that is very close to the card limit, it will be seen as a high credit utilization ratio—something the credit bureaus view as negative. 

Not using credit cards at all.

Unfortunately, none of us can avoid credit or credit cards. A portion of your score is determined by your credit mix or the types of credit accounts you have, and credit cards are an important piece of that equation. To maintain good credit, you need to have a diverse mix of installment loans, like a mortgage or auto loan, and revolving debt, like a credit card.    

Unpaid tickets and fines. 

Any unpaid ticket or fine that is sent to a collection agency could hurt your credit score. These include medical bills, parking tickets and even library fines. Remember that even if you pay a collection it is not removed from your credit record, and any lender that pulls your credit report for the next several years will be able to see that negative marking.

Maintaining good credit can feel like a contentious battle, however, it is vital to your overall financial health. If you’re working to improve your credit, make sure you keep a close eye on the many underlying factors that could be shining a negative light on your credit history.