The 4 sure fire ways to destroy your credit

There is some very valuable information that many consumers seem to be missing. Too many borrowers are not aware what affects their credit scores. This puts these borrowers in an uncomfortable position when they apply for credit and find a score lower than they expected. Today we discuss the 4 things?you must?avoid to maintain good credit.

1. Late Payments: This is the largest factor when determining scores. Late payments have an immediate negative impact that can take months or years to recover from. It is not uncommon to see a drop of over 100 points on 1 credit card late.
2. High Credit Card Balances: This is the second largest factor considered when scores are determined. Many borrowers are not aware that managing the balance - credit limit ratio is very important to maintaining a good score. Again, it is not uncommon to see high balance accounts affect scores dramatically. Up to 80 points is common. Fortunately, these balances and the resulting scores can be changed quickly. Unlike late payments.
3. Closing Credit Accounts: More borrowers are unaware of this than any other factor that affects their score. Closing credit accounts with available credit limits reduces your overall credit availability and the corresponding debt ratio rises. In short, your credit balances appear higher due to less available credit and the affect is the same as #2.
4. Too Many Credit Cards: Establishing more credit than you need or use can cause creditors to view the file as a risk of future liability. It appears unstable if you are applying for every store card that comes your way. Even if you intend to pay them off, opening too many accounts in a short period can put you into a high risk category.?

According to Fair, Isaac, the breakdown of your FICO score is as follows:

• 35% of the score is determined by payment histories on your credit accounts, with recent history weighted a bit more heavily than the distant past
• 30% is based upon the amount of debt you have outstanding with all creditors
• 15% is produced on the basis of how long you’ve been a credit user (a longer history is better if you’ve always made timely payments)
• 10% is comprised of very recent history, based on your efforts to obtain loans or credit lines in the past few months
• 10% is calculated from the mix of credit you hold, including installment loans (like car loans), leases, mortgages, credit cards, etc.

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