Credit Building Tips

What Hurts Your Credit Score?

Sophia Merton
November 17, 2023

When you have a less-than-ideal credit score, it can mean that you have to pay higher interest rates when you borrow money or that you struggle to even be approved for credit. Considering how important it is to have a solid credit score, it’s worth having a fairly thorough understanding of not just what helps your credit score but also what hurts your credit score.

Though there are a number of different credit scoring models that can be used to calculate your precise score, the most common models consider similar factors including your payment history, credit utilization, credit history length, and more.

Solution icon Things like missing just one bill payment, keeping high balances on your card, or closing old accounts can all have a negative impact on your score.

Let’s dive in and take a closer look at some of the surprising things that can damage your credit score to help you keep your score as high as possible.

Understanding What Impacts Your Credit Score

Before we can take a look at what hurts your credit score, we first need to explore how your credit score is calculated. By understanding the different factors that influence your credit, you can get a better sense of how to keep your score healthy and high.

There are two primary entities that calculate consumer credit scores (FICO and VantageScore,) both of which have several different models that have been released over the years. Furthermore, there are some industry-specific credit scoring models that might be used by lenders. This means that you don't actually have one sole credit score but potentially several.

Each of these models consists of its own particular formula for calculating consumer credit scores. In general, though, you can expect the following factors to have an impact on your score.

Payment History

Your payment history is the record of your payments on credit accounts, including credit cards, mortgages, and other loans.

woman paying bills on time to help credit

On-time payments positively affect your score, while late payments, defaults, and bankruptcies can have a negative impact.

Credit Utilization Ratio

Your credit utilization is the ratio of your current credit card balances to your credit limits.

Maintaining a low credit utilization ratio (using a small percentage of your available credit) is generally considered favorable for your credit score. Most experts recommend that you keep it below 30%, but the general rule is that lower is always better.

Length of Credit History

The length of time you've had credit accounts is also considered when determining your credit score.

Generally, a longer credit history shows creditors that you have ample experience managing debt, which reflects favorably in your credit score. This factor usually involves looking at the age of your oldest account, the age of your newest account, and the average age of all your accounts.

New Credit

Opening several new credit accounts in a short period can be seen as a risk, especially if you don't have a long credit history. Each time you apply for new credit, a "hard inquiry" is made, and this can slightly impact your score.

new credit card arriving hurts credit

If you apply for a bunch of different credit cards or loans all at once, it looks to lenders like you might be hard up for cash. This reasonably makes them nervous that you are overextended and going to struggle to actually pay back the money you are borrowing. For this reason, too many new credit accounts can ding your score a bit.

Types of Credit

The "types of credit" factor considers the variety of credit accounts you have, such as credit cards, mortgages, installment loans, and retail accounts. Having a mix of different types of credit can be positive for your score. Though your types of credit in use only usually count for about 10% of your score, the positive benefits of having a diversity of credit account types are still worth keeping in mind.

What Doesn’t Impact Your Credit Score?

There are also a number of factors that you might expect to impact your credit but actually don’t have any influence over your score. By understanding what doesn’t affect your scores, you can get a better sense of what to prioritize when working to improve your credit.

Some things that won’t help or hurt your credit include:

  • Changes in your income: Your income itself does not have a direct impact on your credit score. Credit scoring models, such as FICO and VantageScore, do not consider your income when calculating your credit score. It’s worth noting that, while changes in income don't directly affect your credit score, they can indirectly impact your creditworthiness.
  • Checking your own credit report: When you check your own credit report, it results in a soft rather than hard inquiry. Soft inquiries occur when you access your own credit report or when organizations, like potential employers or existing creditors, review your credit for informational purposes. These inquiries are not associated with credit applications and do not impact your credit score.
  • Personal information: Your personal information, such as your age, gender, race, marital status, or nationality, does not directly impact your credit score. Credit scores are calculated based on specific financial and credit-related data, not personal characteristics or demographics.
  • Being turned down for credit: Credit scoring models like FICO and VantageScore do not take into account the outcome of credit applications when calculating your credit score. However, a credit application denial could indifrectly affect your creditworthiness if you’re stacking up a lot of hard inquiries at one time.

Other Factors That Won't Hurt Your Credit

What else won't impact your credit score? Here are a few other things that might surprise you:

  • Bills paid to merchants that don’t report to credit bureaus: If a merchant or service provider does not report your payment history to the credit bureaus, then those payments won't be considered when calculating your credit score. When you pay bills to individuals for local services or to small companies, your payment history usually isn’t reported to the credit bureaus. At the same time, however, a small business could send your account to a collection agency if you get behind, which would end up on your report.
  • Shopping around for the best rates: Most credit scoring models these days are able to recognize when you’re shopping around for the best rate. In many instances, multiple inquiries will be ignored or counted as one single event if they all occurred within a period of a few weeks.
  • Adding an authorized user: Though becoming an authorized user on someone else’s account can impact your credit, adding one to your own account shouldn’t change your score. When you add someone else as an authorized user, you can help him or her build credit by keeping low balances and always paying your bills on time.
  • Getting hitched: If you’re getting married, you might be wondering what that means for your credit score. While teaming up with someone with bad credit can impact your ability to be approved for joint loans, your own individual credit file and score won’t be influenced by your spouse’s credit history.

What Hurts Your Credit Score?

When it comes to maintaining a healthy credit score, knowledge is power. Understanding what hurts your credit score is just as important as understanding what helps your score. After all, even one little slip-up can have a negative impact on your creditworthiness in the eyes of potential lenders.

Missing a Payment

As discussed above, payment history is a crucial component of your credit score. You might think that it’s not a big deal to miss one payment, but the truth is even one missed payment can damage your score.

Missing even one payment can impact your credit score and have other negative repurcussions. For example, you will likely be charged a late fee and might be saddled with a penalty interest rate. If you continue to miss payments, your account may be referred to a collections agency, which can pursue you for the outstanding debt. 

For this reason, it’s essential that you always at least make the minimum payments on your debts. Setting up autopay is a great strategy for ensuring you’re not relying on your memory to pay your bills on time.

Applying For Additional Credit

If you have decent credit, there’s a good chance you regularly receive pretty enticing credit card offers with some regularity. While there isn’t anything inherently wrong with benefiting from the rewards offered by different credit cards, it’s important to recognize that seeking too much new credit at once can hurt your score.

A hard inquiry, also known as a hard pull, occurs when a lender or creditor checks your credit report as part of their decision-making process for extending credit. This typically happens when you apply for a new credit card or a loan (such as a mortgage, auto loan, or personal loan). A soft inquiry, also known as a soft pull, occurs when someone checks your credit report for a non-credit-related reason. These inquiries do not impact your credit score.

The reason for this is that every new credit application is going to result in a hard inquiry into your account. Your score can temporarily drop if you apply for a number of new accounts in a short span of time, which can be a problem if you’re trying to lock down the best rates and terms for a loan.

Closing Accounts

Paying off debt can be an incredible, freeing feeling. It’s tempting to close your credit card accounts once you’ve paid your final bill, but it’s a good idea to think twice about this. Closing credit card accounts can hurt your score in a few different ways:

  • Increasing your credit utilization: Closing an account will decrease your amount of available credit. This means that your credit utilization will go up, and you ideally want to keep your credit utilization ratio as low as possible.
  • Shortening your credit history length: If you close an account that you’ve had for a while, it could lower the average age of your accounts and shorten your overall credit history. Your credit history length makes up about 15% of your FICO credit score, so you’ll want to think carefully before closing any old accounts.
  • Changing your credit mix: About 10% of your FICO score is determined by your credit mix. Creditors generally like to know that you have experience managing different types of credit. Depending on your current mix, closing an account could mean dropping your score a bit.

Being a Co-Signer

Lots of parents want to help their children in any way they can, and one common method is to co-sign on a loan. Furthermore, it can be tempting to help out a close relative or friend who is struggling to receive a loan on their own.

A co-signer is an person who signs a loan or credit agreement alongside the primary borrower and agrees to take responsibility for the debt if the primary borrower is unable to make the required payments. Co-signers are often used to help individuals who may not qualify for a loan or credit on their own due to a lack of credit history, a less than ideal credit score, or insufficient income.

There’s nothing wrong with co-signing a loan, but it’s important to consider all of the potential consequences before moving forward. If the person you’re trying to help out ends up defaulting, your credit score can suffer. Additionally, mixing money and personal relationships has a tendency to get pretty messy, so make sure you have a clear (written) understanding between the two of you in terms of how you will deal with all of the details of the loan.

Being an Authorized User

Becoming an authorized user on another person’s account can actually be a great way to build credit or improve an imperfect credit score.

An authorized user is a person who is given permission by the primary account holder to use their credit card. While authorized users can use the credit card to make purchases and transactions, they are not legally responsible for the debt incurred.

At the same time, though, you want to be very careful when you sign on as an authorized user, as it won’t do you much good if the primary user keeps high balances or misses payments. In fact, if they aren’t responsible credit users, it can end up hurting your credit.

Consolidating Your Debt

Having too many credit cards can be stressful, and consolidating your debt through one credit card or loan can be incredibly convenient. At the same time, transferring all of your balances to one card or loan could potentially impact your credit.

Not Having Credit Diversity

Though your credit mix isn’t the biggest factor that impacts your score, it’s still a good idea to have a few different types of accounts in your credit report.  The two primary types of credit are revolving and installment.

Revolving credit includes credit cards and HELOCs– essentially, these are lines of credit where you are offered a certain credit limit you can borrow against. Installment loans, on the other hand, involve receiving a lump sum that you pay back over time in regular installments. Examples include student loans, auto loans, personal loans, and mortgages.

Keeping High Balances

Having access to credit can be a great thing, but you definitely don’t want to be maxing out your cards every month. Even if you’re doing a good job making minimum payments on time, you might see your credit score drop if your credit utilization keeps going up, thanks to monthly interest charges increasing your balance.

A little less than a third of your credit score is determined by your “amounts owed,” of which credit utilization is a part. Experts typically recommend keeping your credit utilization at 30% or lower. You can determine your own credit utilization ratio by adding up all of your credit balances and dividing them by your overall credit limit.

Avoiding Credit Cards

While some people struggle with taking on too many new credit cards and damaging their scores through hard inquiries, others stay away from borrowing money to keep themselves free from debt.

While living a debt-free life isn’t a bad thing, it isn’t necessarily a good idea to avoid using credit cards or borrowing money entirely. If the day does come when you want to buy a house or a car, there’s a good chance you’ll want to finance the purchase. Without any credit history, you’re likely going to face an uphill battle in finding someone to lend you the cash.

Declaring Bankruptcy

If you’re considering declaring bankruptcy, it likely means that you have fully exhausted all of the other options on the table when it comes to paying back your debts. While your credit score might not be your biggest concern at the present moment, the truth is it’s worth considering just how damaging bankruptcy can be to your future borrowing options.

There are several different types of bankruptcy, but the two most common types– Chapter 7 and Chapter 13– will show up on your credit report for many years. For Chapter 7 bankruptcy, the negative mark won’t disappear for ten years, while Chapter 13 bankruptcy will stay on your report for seven years.

Debt Settlement

If you strike a deal with a creditor to pay less than you owe in order to settle, it’s worth knowing that this can impact your credit score. At the same time, in many cases, dealing with your unpaid debt is worth it, even though it can have repercussions for your score.


If your home is foreclosed, this info will stay on your credit report for seven years from the first missed payment date. After bankruptcy, foreclosure is seen as the most serious negative event you can have in your credit file.

Collections and Charge-offs

If you stop making payments toward your debt or even fall a little behind, your loan or credit account will eventually become delinquent. If your account remains delinquent for a while– usually between 120 and 180 days– the creditor might write your account off as a loss. This is known as a “charge-off.”

A charge-off is a financial term used by creditors to indicate that a particular debt is unlikely to be collected and is considered a loss or "charged off" on their books. It does not mean that the debt is forgiven, but rather that the creditor has given up on trying to collect the full amount of the debt through regular collection efforts.

You might think that this means you aren’t on the hook for the money you owe anymore, but that, sadly isn’t the case. Instead, the account will likely be sold or assigned to a debt collector, who then tries to get you to fork over what you owe.

Having an account charged off and sent to collections is likely going to hurt your credit score. This information can stay on your credit report for up to seven years.

Not Paying Child Support

It’s not just credit card debt and loans you have to worry about when it comes to your credit score. It might seem a bit unfair, but the truth is that paying the child support you owe on time likely won’t help your credit, but failing to make your payments can hurt your score.

Like most other types of negative info, unpaid child support payments can remain on your credit report for up to seven years.

Not Checking Your Credit Report

Even if you’re doing absolutely everything right, it’s possible that there is some information on your credit report that is dragging down your score. Errors are not uncommon on credit reports, whether they result from a mistake on the part of the creditor or identity theft.

You shouldn’t assume that everything is hunky dory with your credit report– make a habit of checking it regularly. If you happen to notice an error, you’ll want to start the dispute process right away.

Improving Your Credit to Improve Your Financial Opportunities

The importance of having good credit can feel pretty abstract until you are actively trying to get a credit card or take out a loan. At the same time, it can be hard to improve your score overnight– building and improving credit typically takes time.

For this reason, it’s a good idea to stay on top of your credit health by avoiding things that can hurt your score and practicing responsible borrowing habits. For more information about how to keep your credit in tip-top shape, make sure you check out our Credit Building Tips blog!

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Written By:
Sophia Merton

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