9 Ways You’re Accidentally Wrecking Your Credit

You could be ruining your credit without knowing. See which actions you should avoid to keep your credit healthy.

Shocked woman holding credit card
Updated May 28, 2024
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Having a good credit score can unlock valuable financial opportunities throughout your life, including better interest rates on loans and access to the best credit cards. But it’s not always easy to improve your credit, especially if you’re unknowingly sabotaging your score with certain actions.

To help stay on track with your credit, stay away from practices that could potentially damage your score. Here are nine ways you might already be ruining your credit and the solutions for avoiding them.

Closing open credit accounts

BillionPhotos/Adobe Cutting up credit card with scissors

Your credit history length, which is the average age of your credit accounts, is a factor in determining your credit score. Typically, the longer your history, the better your score will be. Closing your oldest accounts could affect your credit history length and harm your credit score.

How to fix this

Keep your oldest credit accounts open, even if they’re credit cards you rarely or never use.

Forgetting to check your credit report

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Your credit report shows all the financial information that affects your credit score. Sometimes, credit reports have errors, which could be bad for your credit. It’s important to frequently check your credit report to make sure the information is correct.

How to fix this

Get free credit reports from all three major credit bureaus from AnnualCreditReport.com.

Signing up for store credit cards

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Store credit cards are often tempting because they can help save you money on certain purchases. But their rewards and benefits aren’t often worth it and they typically have high APRs. Additionally, opening too many credit accounts in a short period can lower your credit score, and new accounts will decrease the average length of your credit account history.

How to fix this

Space out your credit card applications and make sure the average age of your credit accounts isn’t being affected too much by new accounts. Also, consider the best cashback credit cards for better card options.

Co-signing on a loan

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If you co-sign on a loan, you become responsible for paying off the loan. You may have good intentions by being a co-signer, but the possible consequences could be too much, such as the loan not being paid off and your credit being ruined.

How to fix this

If you’re trying to help someone qualify for credit products, consider adding them as an authorized user on one of your credit cards. You don’t have to give them a card or access to your account, but they can still benefit from your positive credit activity.

Not having autopay on and missing a payment

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Forgetting to set up autopay for your credit card payments and bills is one of many money mistakes you can make. If this results in missing a payment, you could have a bad mark on your credit report for years, and your credit score could take a hit.

How to fix this

Set up autopay for your credit card payments and bills. This is often easily done through the online account associated with your credit card.

Having high credit card balances

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High credit card balances can affect your credit utilization ratio, which is the percentage of how much credit you’re using divided by how much total credit you have available. You typically want to stay under 30% credit utilization.

How to fix this

Set up autopay or make multiple payments each month to help make sure your balances aren’t getting too high.

Having bills go to collections

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If you have credit card debt or other bills sent to collections, they’re likely to show up on your credit report. Debt being sent to collections typically only happens if you fail to pay your debt far past the due date. Having collections accounts on your credit report can negatively impact your credit score.

How to fix this

Don’t lapse on your credit card payments or other bills. Even if they’re past the due date, do your best to pay them off before they get sent to collections.

Only using one type of credit

Engdao/Adobe Loan application form with pen on paper

It’s often natural to use multiple types of credit, such as credit cards and loans, throughout your life — whether it’s making purchases with credit cards or getting a loan for a car. But if you only stick to one type of credit, you’re limiting the growth of your credit.

How to fix this

Find ways to use multiple types of credit naturally. This could include credit cards, mortgages, car loans, student loans, and more.

Avoiding credit

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You might see credit as unnecessary or it comes with a bad reputation for you. And in some situations, credit might not be the best option. But if you plan to make your payments on time and control your spending, avoiding credit isn’t the way to go.

How to fix this

If you’re new to borrowing credit, take a slow approach. Learn how credit cards work and make sure you always pay them off on time. This will help you build credit and open up financial opportunities down the road.

Bottom line

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It’s important to be aware of the different ways your credit score can be affected. This will help ensure you only make decisions that will benefit your credit rather than the other way around. If you need to fix your credit, check out these companies that can help repair your credit.

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Author Details

Ben Walker, CEPF, CFEI®

Ben Walker, CEPF, CFEI®, is credit cards specialist. For over a decade, he's leveraged credit card points and miles to travel the world. His expertise extends to other areas of personal finance — including loans, insurance, investing, and real estate — and you can find his insights on The Washington Post, Debt.com, Yahoo! Finance, and Fox Business.