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What Hurts My Credit Score The Most?

Sarah Li Cain4-minute read
March 30, 2021

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Your credit score reflects your likelihood to pay back debts responsibly. This number is based on your credit history (i.e., the types of debt you currently have or previously had and how you paid them off in the past), and lenders use it to decide whether or not to grant you a loan or credit card.

The higher your credit score, the less you’re perceived as a risk to lenders. Even if your credit score is pretty good right now, there are factors that can hurt your credit score.

Let’s take a look at what helps and hurts your credit score the most.

What Hurts Your Credit Score The Most?

It’s a close one, but your payment history is what lowers your credit score the most. Since payment history affects 35% of your FICO® Score, it’s not a good idea to fall behind on your payments.

Here’s a bit more detail about payment history and how it can hurt your credit score:

  • Even one late payment that’s more than 30 days late can have negative consequences. The 30-day mark is when credit card issuers are more likely to report a late payment, though it could take as long as 60 days.
  • If a lender reports a missed payment, that can stay on your credit report for up to 7 years.
  • Even one missed payment can have a negative impact, even if it’s just a phone bill.
  • If you’re an authorized user on someone else’s credit card and that person missed a payment, that can negatively affect your credit score.
  • The same goes for if you cosigned a loan. If your cosigner doesn’t pay, you’ll need to pay or else your credit score will suffer.

So what we’re saying is: Make sure you pay all your bills on time. If you’re struggling to keep up with payments, it’s a good idea to talk to your lender or credit card issuer before anything bad happens.

Other Factors That Lower Your Credit Score

You’re probably wondering what the other 65% is that affects your credit score.

These are the other factors, according to myFICO®:

  • 30% – Current debts
  • 15% – Length of credit history
  • 10% – New credit applications
  • 10% – Mix of current debt 

As you can see, some factors weigh more heavily than others.

For current debt, determining your credit score is based on the amount you owe versus how much credit you have available to you (also referred to as your credit utilization ratio). To calculate what yours could be, simply divide your current account balance amount by your available credit.

For example, let’s say you have a $5,000 credit limit spread out across your cards. You have a balance of $1,000 on one card and $500 on another. That means your credit utilization ratio is 30%.

Owing money on your credit accounts may not mean you’re a high-risk borrower. But if you’re using a lot of that available credit, you could be stretching yourself too thin. In other words, the higher your credit utilization ratio, the lower your credit score might go.

The other factors like length of credit history, new credit and mix of current debt can also affect your score even if it’s not as much as your payment history and credit utilization. However, if you do something like apply for a bunch of loans or credit cards within a short span of time, it can lower your score (but not as much as other actions). There’s also not much you can do about the length of credit history; you just need time and mix of current debt if you don't intend on opening a different kind of loan for a while.

Things That Help Your Credit Score

Now that you understand what can hurt your credit score, here are a few actions you can take to help it:

  • Make sure you pay all your bills on time. Take advantage of autopay if you have to.
  • Have a diverse range of credit and loan products. Think credit cards, car loans, mortgages and home equity loans. That said, don’t open a bunch of accounts for the sake of having a good credit mix.
  • Check your credit report annually. You can get one every year for free from each of the three major credit reporting bureaus at AnnualCreditReport.com. If there are any errors, reach out and get those fixed ASAP.
  • Consider keeping your oldest credit card open even if you don’t use it, as you want to maintain a lengthy credit history.
  • Be strategic about when you apply for new credit. Too many hard inquiries can lower your score. However, if you’re applying for the same kind of loan (think mortgages), making multiple applications within a short amount of time will only count as one inquiry.
  • Try to keep your credit card balance as low as possible (ideally less than 30% of your available credit) in order to keep your credit utilization ratio down.

Boost Your Credit Score

Having a good credit score is crucial if you want to get the most favorable rates for loans and increase your chances for approval. Plus, many of the best credit cards (with cash back or travel rewards) require excellent credit scores.

If you want lenders to believe you’re a responsible borrower, work on maintaining or increasing your credit score. You can start doing that by monitoring your credit history, learning what affects your credit score and taking the right steps.

Rocket HQSM has partnered with CardRatings for our coverage of credit card products. Rocket HQ and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.

Sarah Li Cain

Sarah Li Cain is a freelance personal finance, credit and real estate writer who works with Fintech startups and Fortune 500 financial services companies to educate consumers through her writing. She’s also a candidate for the Accredited Financial Counselor designation and the host of Beyond The Dollar, where she and her guests have deep and honest conversations on how money affects our well-being.