Hey people, are you crunched under the pressure of having heavy debts? Are you in the habit of making late payments? Please, don’t do it. Stay away from this habit and do not allow your account to go into collections. Along with that, avoid tax liens, bankruptcies and foreclosures ending up your financial plans.

Above all, do not forget to pay down your credit card debts. These are some of the primary things that you need to take care, so that your credit score is not lowered.

However, do you know there are some lesser-known factors that do lower your credit score without alarming you. Here you will find 5 such actions that can make you plunge in the pool of  factors that can lower your credit score.

Using Your Debit Card to Rent a Car

There are many rental agencies in America that requires your credit card to pay out the deposit, but there are some who also accept your debit card. However, a condition works out here, if the company wants to check your credit report, they can, in case you prefer to pay with debit cards. That type of credit check requires a hard inquiry , which do affect your credit score a little.

These types of hard inquiries usually drop your credit score by a few points and continue to exist on your credit report for more than two years or long.

Requesting an Increase in Credit Limit

This is no doubt a good idea to ask for an increase in the limit on the credit card that you use often. This might help to improve your credit score in the end. It can damage the credit score if you opt for a hard inquiry. When you think to request for limit increase, ask whether it will initiate a hard or a soft inquiry on your credit report, as different institution has different way to handle the matter.

Have an Account in the Credit Union

There are many people who are shifting their money from big banks to smaller credit unions. It is very important to mark that a new account can shoot up a hard inquiry. So, before you apply do ask whether your new account will involve a hard inquiry or a soft inquiry on your credit report. This type of inquiry is not unique to the credit unions, as in most cases the credit union prefer to have a hard inquiry on your credit reports.

Having a Business Credit Card

Previously the business credit card activities never use to show themselves on your credit report, but now it does. Now the card issuers require a ‘personal guarantee ‘ when you apply for a business credit card. You need to be a co-signer with your company on the credit card. Your company will be obliged to pay the balance, but in that case, your credit card will fail to keep up with the paperwork or default a payment.

Seal That Old Credit Card Account

This is no doubt a good idea, you need to get rid of the old credit card account. However, it will decrease the length of your credit history and will in turn increase the credit utilization rate, in both the case your credit score may be lowered. In general, it is better to avoid the closing of old credit card account, since the long credit history is your asset.

These are some of the little things that you ignore, but yes, they do have some impact on your credit score in the long run.

Topics #Credit Rating #Debt #Finance Tips #Guest Posts