Essential Tips to Avoid 5 Common Credit Killers and Boost Scores

5 Credit Killers

What are the top factors that can damage your credit score?

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A good credit score speaks volumes about your financial habits. It's the evidence most creditors need to evaluate your credit worthiness.

Interestingly, there are some credit killers that even people maintaining good credit scores would unwittingly be a part of, which will be their undoing when applying for credit facilities in the future.

These mistakes may seem to be insignificant, but when the time comes, you may face more problems than you expect.

Avoiding Debt

Creditors need to evaluate your financial history to approve any credit facilities.

If you have no previous or existing debts, it might adversely affect your case, as creditors have no way of checking out how you'll handle the credit you get from them.

Shopping For Rates

Looking around for the best rate may actually turn out to be bad.

Too many inquiries within a short period could damage your credit score.

Usually, if you do more than 3 or 4 inquiries within a single month, you are likely to scare the lenders. For the same reasons, transferring the balances on your credit cards could be a bad idea as well.

Assuming There's a Grace Period

If you are late on a payment by even one day, you are late, period.

Never assume there's a grace period for late payments, because it only affects your credit score negatively.

Closing Old Accounts

Because your relevant transaction history also gets erased when you close your old accounts, your credit history is shortened and it may lower your credit score.

If you want to close your old accounts, close everything except the oldest account, which will leave a longer history.

Co-signing Loans

The obvious problem here is that the primary borrower's mistakes will end up on your credit report as well.

Small Business Finance SME Newscast

Podcast Cover Image This week: Hotter September‑quarter inflation on 29 October boosts odds of an RBA rate rise next week, so SMEs should revisit cash‑flow and repayment stress tests. The governments Tax Reform No. 4 Bill proposes a new innovative business CGT concession, R&D changes, and optional monthly PAYG instalments from 1 July 2027, with ATO enforcement for non‑compliers. A separate proposal for a 30% minimum tax on discretionary trusts heads to Senate hearings in November after submissions closed on 29 October. And the small business insurance inquiry delays its final report to 26 February, so businesses should review coverage and costs at renewal in the meantime.

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Published: Sunday, 1st Aug 2021
Author: Paige Estritori

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Cost of Capital:
The required return necessary to make a capital budgeting project, such as building a new factory, worthwhile.