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Three Ways People Ruin their Credit with Credit Cards

Stephen Leifer - Wednesday, July 19, 2017

Behavior patterns and financial decisions related to the use of your credit cards can have negative consequences to your credit status.  Mistakes that may cause a significant lowering of your credit scores include:


Making Late Payments


Making late payments  (30 days or more)  will cause significant damage to a person’s credit.  Lenders see this action as an indication of poor money management or that a person has too much credit available to them based on their income level. Another words, they cannot afford their payments. If a person later wants to borrow money, late payments show that the consumer is a higher risk.Higher risk may cause credit denials, higher interest rates or more restrictive use of the funds. 

Paying Credit Card Debt Off Too Slowly


Some people only pay the minimum balance owed, but this can lead to owing interest and fees for many years.   Carrying balances for years at a time negatively affects a person’s credit rating.  That rating or credit reflects the level of risk associated with that consumer. Since nowhere on a credit report is a consumer’s income, nor level of assets, having large balances can make lenders nervous that the consumer will default on the amount owed or make them concerned that the debt will not be repaid if the consumer experiences a job loss or sudden illness. 

Paying off the Debt Too Soon


People who have gotten into credit card trouble in the past may be hesitant to make charges or to leave a balance owing each month.  However, credit cards must reflect activity in order to have data to report to the credit bureaus.  Lenders want to see a responsible use of credit . When regular (on time) payment information is reported to the credit bureaus, the consumer can earn positive information on his or her credit reports.  This will have a positive effect to their scores.

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