Ready to watch your credit score tank? Who needs good credit anyway? Adopt these reckless behaviors, and you’ll have poor credit in no time.
1. Pay your bills late
Missing your due dates on utility bills, cell phone bills, credit cards and other payments will lead to dings on your credit report.
While everyone has forgotten to pay their cable bill on time at least once, a habit of paying bills late will wreak havoc on your credit score.
Solution — always pay your bills on time. If you have a tendency to forget, set up auto-pay for your bills to make sure you are never late or set recurring reminders on your calendar.
2. Stop paying your bills
While you’re at it, just stop paying your bills all together.
If you neglect paying your bills long enough, your creditors may send debt collectors after you, and your credit report will reflect this doozy. Bad credit, here we come!
Solution — if you’re having trouble making your payments, talk to your creditor to see if you can arrange an alternate payment plan that does work for you.
You may also consider working with a debt counselor who can negotiate with creditors on your behalf.
“If you want your credit score to drop,
apply to every credit card in sight!”
3. Max out your credit cards
Part of your creditworthiness is based on your credit-to-debt ratio. If you consistently use the maximum credit available on your credit cards or “max out,” you will increase your likelihood of having bad credit.
Solution — keep a good credit-to-debt ratio. This means to never max out your credit card — always leave a nice buffer between your balance and your credit limit. You want them to see you don’t need the full amount.
Opening up a new credit card, even if you have bad credit, will help improve a credit-to-debt ratio. This might temporarily ding your credit score, but it should help you in the long run.
4. Declare bankruptcy
Why not fast track your way to bad credit by filing for bankruptcy? This legal proceeding has its benefits if you’re in dire straights, but it’s also an easy way tank your credit.
Solution — only apply for bankruptcy as a last resort. It’s not a get-out-of-jail-free card.
5. Apply for credit cards excessively
When you apply for a credit card, a credit check is run to ensure you’re creditworthy. While it won’t hurt your credit score if it’s only on occasion, frequent credit checks will negatively impact your credit.
If you want your credit score to drop, apply to every credit card in sight!
Solution — when you need a new credit card, choose the one you want most and apply for it.
Don’t apply to 10 different cards in hopes of getting approved for a few. Each of those will require a credit check, and all of those will add up and damage your credit score.
If you’re denied, apply for the next on your list, but avoid the temptation to apply to many cards at once “just in case.”
Photo source: moneycamel.wordpress.com.