Mistakes that hurt your credit

1. Closing the old card you no longer use

It seems responsible, but by closing it you lose its limit and your total utilization jumps, and you lose its age, which makes up 15% of the score.

What to do: leave it open, use it once every few months for something small, and pay it in full. If it has an annual fee, ask whether you can switch it to a no-fee version to keep the account age.

2. Cosigning without understanding what you signed

When you cosign, that debt is yours: it appears on your report, counts toward your debt-to-income ratio, and if the other person falls behind, the late payment lands on your history. It is not a favor, it is taking on someone else's entire debt, and getting out of a cosign later is hard.

3. Letting an account go to collections

Many people ignore a small debt. That account can go to collections, be reported as negative, and stay for up to seven years with damage out of proportion to its size.

What to do: if you know you will not be able to pay, call the creditor before falling behind. Many have payment plans or deferrals that they do not offer unless you ask.

4. Believing that paying a collection erases it

Paying it changes the status to “paid,” but the account usually stays on the report for the rest of its time. That does not mean you should not pay: it means that before paying you should check whether it is correctly reported and whether the party collecting can prove it has the right to do so.

Heads up: in some cases, a partial payment on an old debt can restart legal time limits. Consult about it before paying an old collection.

5. Keeping cards maxed out even if you pay on time

Utilization makes up 30% of the score and is calculated on the reported balance, not on whether you pay well. Someone with perfect payments and 95% utilization can have a worse score than someone with less history and low utilization.

6. Applying for several cards in a row

Each application leaves a hard inquiry. Several within a few weeks lower the score and signal to the bank that you are seeking credit urgently, which increases denials. If you are denied one, stop: ask for the letter with the reasons, address what it says, and come back in a few months.

7. Never reviewing the report

It is common to find errors: accounts that are not yours, incorrect balances, duplicate debts, or altered dates. If you never review, you do not know what is costing you points, and discovering it when applying for a mortgage may be too late to fix it in time.

8. Changing jobs or opening credit right before closing on a home

The lender checks your credit and your employment again before closing. Between approval and the keys: do not buy anything on credit, do not change jobs, and do not move large amounts of money between accounts.

9. Believing impossible promises

If someone offers to erase real debts, guarantee you an exact number of points, or create a “new credit file” with a different identification number, walk away. The latter can be a federal crime: using an alternate number to start a “clean” history is fraud, and the one left with the legal problem is the consumer.

10. Giving up too soon

Credit is built with consistency. It is neither fast nor linear: there are months when it barely moves and others when it jumps. Someone who quits after two months may miss the result that was further ahead.

Summary: what to avoid and what to do

• Closing old cards: leave them open and use them lightly
• Cosigning without thinking: assume that debt will be yours
• Ignoring a small debt: call the creditor before falling behind
• Paying a collection without checking: first verify whether it is correctly reported
• Keeping cards maxed out: keep utilization under 30%
• Applying for several cards in a row: one at a time, months apart
• Never reviewing your report: review it twice a year
• Opening credit before closing on a home: wait until you have the keys
• Believing impossible promises: distrust anyone who guarantees points
• Giving up after two months: progress is cumulative