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You probably already know that carrying a lot of credit card debt will impact your credit score. However, you may not realize that there are many other ways to hurt your score as well. Should you make these mistakes, you may struggle to secure financing, rent an apartment, or land a job, despite having little or no debt. To prevent that outcome, learn more below.

How Might You Be Hurting Your Credit Score?

1. Paying in Cash

Even if you have the cash to cover all your expenses, it's wise to use a card on occasion. As long as you use it for items you were going to buy anyway, you won't end up with credit card debt. Lenders want to see that you can handle debt responsibly by making at least the minimum payments on time every month, but if you have no credit history, there's no way for them to verify this. In other words, having no credit can be just as detrimental as having bad credit.

2. Closing Accounts

credit card debtThe average age across all your accounts affects your credit score. A higher average lends to a better score because it proves you've been managing credit for a while. As such, closing old accounts or paying off installment loans can actually cause your score to dip. While you can't do anything about the drop from paying off loans, you can at least keep all your oldest revolving accounts open to maintain a high average.

3. Overlooking Errors

Identify theft is a significant problem in the digital age because it's easier than ever to obtain others' personal information. Should it happen to you, your credit score will inevitably take a hit. Whether thieves rack up credit card debt or finance a vehicle, you'll want to erase the discrepancy fast. Review your credit report once a quarter for errors, and take the bureau's recommended steps for addressing them if you spot any.

 

If you're concerned about your credit score, turn to Brian R. Cahn & Associates, LLC. With several offices throughout Northwest Georgia, this practice helps clients achieve much-needed debt relief. Backed by more than 25 years of experience, they can assist with foreclosure defense, lien stripping, and bankruptcy. Whether you're behind on your mortgage or facing an overwhelming amount of credit card debt—or both—they’ll devise solutions for regaining your financial footing. To request a consultation, reach out online or call (770) 382-8900.

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