Are You Hurting Your Credit Scores?

February 05, 2012

bad credit scores Good credit scores are precious commodities these days. Because lenders are still wary about taking risks, people with subpar scores may find it difficult to receive new lines of credit. Having good scores helps you receive better interest rates when refinancing a home or opening a new line of credit. Even if you use credit responsibly, some seemingly harmless activities could still lower your scores.

In “Why Bad Credit Scores Happen to Good People,” the experts at FreeScore examine some of the lesser-known ways people could damage their credit.

The article cites a recent MSN Money article that lists common behaviors that may lower your scores. These activities include:

  • Taking out a student loan – Even though student loans are not that different than regular loans, they could hurt your score because of one major difference. Student loans are often reported as they are disbursed each semester. Rather than one lump sum, your credit report may show a series of smaller loans. To lenders, this may be interpreted as a red flag because it looks like you consistently need to borrow money. Consolidating the loans after you graduate will help clear things up, but until then, your credit scores might take a hit.
  • Buying a motorcycle – Motorcycles are technically vehicles, but the loans for them are treated differently. If you finance a motorcycle, it will probably be treated as revolving credit. This means that the amount of the loan will show up on your credit report similar to a large credit card bill. Because this type of loan counts against your total available credit, you may be seen as a risky borrower. Using the majority of your available credit (80 to 90 percent) will hurt your credit scores.

Be sure and read the rest of the FreeScore article to learn about other simple mistakes that could hurt your credit scores. If you’d like to keep track of your credit scores and reports, sign up for the Power of 3. This bundle of services gives you access to all three credit scores and reports; 24/7 credit monitoring protection; and automatic alerts that notify you when something changes. Don’t be caught off-guard by a sudden change in your credit scores. Let FreeScore keep you informed and protected.

Categories: Economy, Education

About The Author

Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.

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