Having good credit is essential for a number of aspects of your life, ranging from
the interest rate on a car loan or credit card to background checks for
employment. Poor credit can be incredibly expensive, costing you thousands of
dollars in higher interest rates over the course of a home loan. Fortunately, with
proper care and attention paid to your finances, it is possible to maintain a good
credit rating.

Here are six factors that could damage your credit score:

1. Not paying your bills on time – Bills not paid within 30 days can be reported to
the credit bureaus.

2. Utilizing all of your available credit on credit cards – It is important to not max
out your credit cards without a plan to pay them off.

3. Not having a diverse mix of credit – Having different types of credit, such as
car loans and revolving credit, could help improve your score.

4. Applying for too much credit – Multiple applications for credit cards in a short
period of time can be a bad sign.

5. Not using credit at all – You must show that you can responsibly use and
manage credit in order to maintain a good score.

6. Closing credit cards – Keeping long-term accounts open is important, as
closing them removes the positive history from your report.

Good credit is especially essential when searching for a new home or home loan.

Having a good credit score can make the difference between having your loan
accepted and being declined. Poor credit might be preventable if you pay attention to the
above-mentioned criteria, so be sure to stay on top of your finances to ensure