Credit can impact everything from your monthly bills to your ability to buy a home. So if you have a solid score, you want to keep it that way. There are a few common financial missteps that can completely tank your score, though, and Credit.com tells us just how much.
There are a few common financial snafus that affect anyone’s credit score, but if yours is high, the drop may hit you especially hard. Credit.com details just how much of a hit you can expect with the following:
A First Missed Payment: Payment history is the most important component of major credit scoring models. As such, your first 30-day delinquency on a bill can really cost you. In fact, a recent late payment can cause as much as a 90- to 110-point drop on a FICO score of 780 or higher.
Debt Settlement: Letting a debt go to settlement can also cause a similarly good score to fall around 105 to 125 points, per FICO’s test scenario.
Maxing Out a Credit Card: While it wouldn’t inflict the same type of damage as a late payment, someone with a good score of 780 would have to weather anywhere from a 25 to 45 point drop for using all of that available credit limit, according to a test scenario conducted by credit scoring model FICO
If your credit is fair or poor, you’ll still take a hit, and you can see additional numbers over at FICO. Whatever your score, beware these habits.
For more detail, head to the link below.