Bad Credit Card Debt

With such intense scrutiny over your individual credit score for the large purchases that make for a good life, the importance of keeping your credit score as good as it can be can hardly be understated. However, there are many ways that you may be negatively affecting your credit score. The worst part is, most of these mistakes can easily be overlooked. Most are complete mistakes on the part of the credit holder; however, lenders do not make distinctions between "real" credit dings and mistakes. Below are a few of the ways that you may be negatively affecting your credit score without even knowing it:

1. Allowing many inquiries on your credit report in a short period of time. Lenders look down on this because they assume that people who allow many credit inquiries are, in fact, in too desperate a need of credit. People in desperate need of credit are, in their opinion, often the same cash strapped people who have difficulty paying back loans.

2. Your credit balances vs. your credit lines. If your credit cards are at or over their limit, lenders will either assume that you rely on credit to live, or that you have a problem spending money that you do not have. Or possibly, both.

3. Closing credit card accounts. Point 2 and 3 are related, because as you close credit accounts, your total credit available goes down. If the amount of credit you use remains the same, it now looks as if you are borrowing a higher percentage of your total available credit. They will then assume that you are among one of the groups mentioned in Point 2.

4. Closing credit accounts with long histories. Having credit with a long history is worth approximately 15 percent of your overall credit score. Lenders are, of course, more likely to think of a borrower with a long history of successful borrowing as more responsible and able to pay back loans. Therefore, if you are faced with a choice of accounts to close, always choose the newer account.

5. Using debt counseling services. Lenders want to see bills paid on time and in full. Any outside assistance you seek in this endeavor leaves a bad taste in a lender's mouth. They assume that if you need assistance in paying bills on time and in full, that you will have more trouble paying back a loan.        

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