How to Ruin Your Credit in 6 Easy StepsPosted March 7, 2018 - updated March 11, 2018 in Offbeat
If you’re headed off the grid, or just want to make your life difficult, then this article is for you. We explore the best ways to hurt – and ultimately destroy – your good credit. Who wants a good credit score anyway? Without further adieu, here are 6 ways to ruin your credit:
1. Only Pay the Minimum Payment
Get in the habit of only paying the minimum payment on your credit card. The credit card companies make it so easy! They tell you the minimum payment you can make to still keep your account in good standing. It’s so low and affordable.
While paying the minimum payment is better than not paying at all, it can still negatively impact your credit score. If you’re using over 35 percent of your available credit and only paying the minimum, your credit score is likely to take a hit. Instead of only paying the minimum, aim to pay down your credit card balance more quickly to bring it back into good standing.
2. Pay your Credit Card Payment Late
Paying your credit card payment late is a great way to do some damage. And it’s so easy to do! You already forget all sorts of important things, so make this one a priority. Start forgetting today!
Lenders want to see that you have a consistent history of you paying your credit card on time. When you’re constantly late, it adversely affects your credit score. The credit bureaus have different rankings for how late you are with your credit card payments. You don’t need to know them all, but the bottom line is, try your best not to be late at all. Not only will your credit score take a hit, it will cost you a good chunk of change in interest and late fees, too.
3. Apply for a Hundred Credit Cards
You might get approved for the first 2 or 3, but after that the declined letters will start pouring in. When you’re ruining your credit, more is better. Definitely hit the mall for all those great retail credit cards too.
The credit bureaus and lenders care about the number of credit inquiries on your credit account. If you have a high number of credit inquiries, it’s a worrying sign for lenders. Lenders assume (rightly or wrongly) that you’re applying for credit and you’re constantly turned down. While this isn’t always true, this is how they perceive it. For that reason be careful when applying for credit. Don’t apply at too many lenders, especially when you’re shopping for a mortgage or your credit score could take a hit.
4. Max Out Your Credit Cards
Go all the way…and then some! Don’t just stop at one card. Remember the 100 cards you applied for in the previous step? Yeah, max those out too.
This shouldn’t come as a surprise, but maxing out your credit cards is frowned upon by the credit bureaus and will hurt your credit score. When you’re maxed out on one or all of your credit cards (or go over your credit limit), lenders view you as a higher risk of default. For that reason your credit score is likely to take a hit. This can make it harder to obtain credit from other lenders. You may have to pay a higher interest rate or your credit application may be denied all together.
5. Close Old Credit Card Accounts
Remember that credit card you got in university? Close that one first. In fact, any old accounts are ripe for closing to do the most damage to your credit.
If there’s a credit card at the bottom of your wallet that you’re thinking of cancelling because you haven’t used it in a while, you might think twice about doing so. That’s because credit history matters when it comes to your credit score. Lenders want to see that you have a long, steady history of paying your credit cards in full and on time. Instead of cutting up your old credit card, to avoid losing any accrued rewards, try to use it every six months.
6. Just Stop Paying the Man
Steps 1-5 will definitely do some damage, but if you want to ruin your credit fast then this one is for you. It’s simple. Go to your mailbox and get your credit card bill. Don’t open it – just toss it in the garbage. Oh and keep spending on the card (see #4 above.) Do this every month for about 3-4 months. Your credit will be completely ruined. Enjoy your 485 credit score!
If you’re anything like me, you’ve read enough articles on how to improve your credit score. We thought we’d go tongue-and-cheek this week and play devil’s advocate with these six easy ways to ruin your credit score. Now, we’re not saying you should do these. On the contrary. These are the things not to do. Duh! Some of them are obvious, while others maybe not so much.
The Bottom Line
Are you thinking of making a major purchase like a house or car in 2018? Then maintaining a good credit score matters. Avoid making any of these credit “mistakes” and keep your good credit intact for the coming year. Or…follow these steps to your credits’ demise.