The Most Common Financial Behaviors that Negatively Affect Your Credit Score - VFCU

The Most Common Financial Behaviors that Negatively Affect Your Credit Score

Your credit score is one of the most important factors that lenders take into account when deciding your interest rate. The difference between having a good credit score (700 and above) and a bad one (629 and below) is how you treat your finances. Avoid the missteps below to increase your score for a less stressful life.

Whether it’s one of our credit cards or checking accounts, our services can help you stay on track and budget!

Late Payments

Did you know that paying off a debt on time makes up 35% of your credit score ranking? This doesn’t necessarily mean that your credit score will suffer if you miss one or two payments, unless you make it a habit month after month of doing so.

Always keep in mind that creditors will not hesitate to increase your interest rate and charge late fees even after a couple of late payments, so pay on time! Also, never close a line of credit if you still owe payments on it. This can significantly affect your score as well.

Increased Debt

If you end up increasing your debt with any credit line, expect your score to take a dive. If you also carry the balance for an extended amount of time, your score will also take a hit. Extended credit takes up another 30% of your credit rating. We recommend using credit cards only when in a bind and making it a priority to pay them off as quickly as possible.


Periods of unemployment hit everyone at some point or another. Unemployment benefits can help ease your financial situation, but this can slightly affect your credit score too. Receiving unemployment benefits for a short period is best if you don’t want your credit score to take a hit.

The three largest credit bureaus in the United States may be unaware of your employment status, but they will notice your decreased level of income. This, of course, is what keeps many from paying off what they owe, and the result is a lower credit score.

Continuously Applying for Credit

When applying for more than one line of credit, creditors will definitely take notice and may decide to lower your score as a result. Be aware of how many times you apply for credit. If you do so at two stores, apply for a loan the following month and apply for a car loan the next, don’t be surprised if your score dips.

Ignoring Responsibilities

Any ignored debts will end up hurting your credit score. Other responsibilities, such as medical, electrical, phone and cable bills can also affect your credit score if ignored. See if you can set up a payment plan with whichever company you owe money to.

VFCU Can Help

To ensure that your credit score is at a good level, we suggest checking it at least once a year. If you notice payments applied to your account that aren’t yours or other discrepancies, immediately bring it to the attention of the bureau you received the report from. For more financial insights and services that make keeping track of your money easier, contact our credit union in Harlingen today!

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