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10 Ways to Ruin Your Credit Score Rating

credit score ratingThis is a guest post by Steve from Money File. Since I don’t ever suggest using debt as a tool for acquiring assets or building a business, I don’t often talk about credit (or a credit score rating for that matter). But, if I did not have good credit, I would not have been able to purchase our house last week. So, for this purpose, it’s a good idea to keep an eye on your credit score.

10 Ways to Ruin Your Credit Score Rating

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Obtaining credit is something that most of us will need to do at some point, whether it is for:

  • a mortgage,
  • to purchase a car, or
  • simply to pay for a holiday or other major purchase.

Managing our finances is not something that all of us are good at, and it is all too easy to find you have made serious injuries to your credit score rating! Paying attention and remembering the following simple tips will help you to keep your rating intact.

Related: 9 Benefits of Having a Good Credit Score

1) Late and Missed Payments

You have a certain amount of time to make the minimum payments on your cards. Make sure you pay them all on time as late payments or missed payments can result in damage to your credit score rating.

2) CCJ’s

County Court Judgements are made when you do not respond to reminders for payment, and are a serious problem where your rating is concerned.

3) Third Party Usage

Don’t allow others to use your card as even your closest family or friends may find it easy to abuse your generosity, resulting in bills that are beyond your control.

4) Exceeding the Limit

Your card will come with a credit limit; keep within it or you incur charges and reduction in your standing.

5) Mortgage Default

If you have a mortgage make sure it is paid on time, every time, or you will certainly have problems with your credit score rating. And, in the extreme case, you may lose your home.

6) Unpaid Accounts

This is taken very seriously by credit companies, especially if the borrower refuses to co-operate. If you find your circumstances change, inform the lenders immediately as it is in all parties interests to work together to resolve the problem.

7) Fraud and Inaccurate Information

Never use another person’s name to get a credit card, loan or mortgage as both of you will find your credit score rating ruined when the fraud is uncovered, and maybe even worse!

8) Consistent High Balance

The best way to keep your rating intact and healthy is to pay off as much as you can each month. Those who keep the balance on cards at the highest level and only pay a small amount find they are not accorded a rating as high as it may have been.

9) Excessive Applications

If you are applying for credit all the time and constantly being refused you are damaging your credit limit.

10) Poor Budgeting

A general point this may be but it is an important one. We should all be aware how much money we have coming in each month, and remember that a credit card is not an extension of this. You need to be able to meet the repayments!

How About Your Credit Score Rating?

Credit is an excellent and convenient method of advancing your spending power, and your credit rating is one of the most important aspects of your life. Guard it carefully and build it up, and you will be able to rely on it for the rest of your life.

Related: The Best Credit Cards for Good or Excellent Credit

Budget Money


My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. Credit is becoming increasingly important as some companies are now using it to screen job applicants. It is best to keep your finances in order.

    • That too! It’s really messed up isn’t it. Let’s say I am a super responsible kid and I have paid my way through college with no debt and I have my own paid-for car. Sounds like a really good candidate for a job, but no, the employers would rather have the kid that partied all through school and has massive debt with a car payment. Whose idea was it to start that? Crazy….

  2. It’s crazy that even a tiny charge off of 8 dollars could even impact the rating. I know because it happened to me! It’s very frustrating, especially when you were not even aware. Now I watch my accounts very carefully.

    • Yep. Every small action counts toward that score. It’s unfortunate that it’s become so important in our society today, but we can’t ignore that fact either. Keep that score up and pay off the credit card every month!

  3. Although you listed many bad guys on your report..your title could have been two ways to ruin your credit rating. 1)Use too much credit
    2)Fail to pay on time.

    The good news is that in time, all errors can be corrected! How’s that new house?

    • Well said Brenda! I love your point. Haha, funny you should ask about the house. Check out tomorrow’s post – I’ll have a recap of our adventure today. 🙂

  4. All can hurt your credit rating, but I’m not so sure I agree with “ruin”. Not that you should ever intentionally do any of these things, but you can fix even the worst credit if you have to. I did it, and its not all that hard.

    • You’re right, but it takes time, and we all know that time is a very precious commodity.

  5. We had our credit rating take a dip when some other organization failed to pay a bill after our copay was met. Talk about frustrating. We try to live by the motto of “do what’s right because it’s right” and then someone else messes it up.
    However, we realized that everyone makes mistakes and our credit score is still very good. 🙂
    If I let something that small get me down, then I need to grow up.

    • Good attitude Kevin! I’m sure your score will come back up to what it was before this third party dropped the ball. Best of luck!

  6. Seems great,Personal finance expert spend a lot of energy trying to prevent us from using credit card and with a good reason.

    • Very true Novie! I have a credit card, but really the only time we use it is for my wife’s work expenses. It helps us keep the transactions separate, and therefore easier when we’re ready to be reimbursed by the company.

  7. I particularly appreciate #9 because most consumers don’t realize that simply applying for credit can damage your score.
    Just one thing I would add though: even if you are approved for whatever you’re applying for, you will still get the same ding on your credit report. But, all applications done within a 30-day period will count together as one. So when you’re shopping around for a credit card, make sure you send in all the applications within a few weeks time. 🙂

    • Great tip Jason! Thanks! Avoiding that credit ding is always important. After this house, I think I’m going to plan on paying cash for everything – keeping a solid credit score is a pain in the butt.

  8. All can hurt your credit rating, but I’m not so sure I agree with “ruin”. Not that you should ever intentionally do any of these things, but you can fix even the worst credit if you have to. I did it, and its not all that hard.

  9. “On a debt management plan we renegotiate your monthly unsecured debt payments down to a level you can afford”

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