The one number with the ability to determine your future—for better or worse—is your credit score. This score, also known as a FICO score, determines your creditworthiness and the likelihood that you’ll pay your bills. A bad score can do more than keep you from getting a loan; it can also make you ineligible for rental housing or an amazing job. So what lowers your credit score? There are several culprits to steer clear of.
What lowers your credit score? Here are 5 things:
5.) Identity Theft
Identity theft can be a silent credit killer, especially if it goes undetected for a while.
A crafty thief may use your personal information to get new credit cards in your name on the sly and charge thousands of dollars to them. A craftier thief may receive expensive medical care under your name.
Based on some of FICO’s key scoring components, what lowers your credit score with respect to identity theft is the payment history.
If a thief opens a credit card or takes out a loan using your personal information, chances are he’s never going to pay the balance. Credit card issuers typically report late payments to credit bureaus once they’re 60 days past due. Payment history accounts for 35 percent of your credit score, and a single missed payment can cause it to drop by as many as 110 points.
It takes time to repair credit score damage from fraud, even after you’ve reported it to the card issuers and closed the cards.
The Federal Trade Commission says that you can protect your identity by not responding to soliciting phone calls or phishing emails. In addition, maintain the security programs on your computer and shred documents that contain sensitive information about you.