What causes a credit score to go down?

[James Bond]

What causes one's credit score to go down?
I have no credit cards, but I do have several things under my name which I pay for monthly:
My car, apartment, car insurance, utilities, etc.

If I pay for one of these things a couple days late, can that hurt my credit? Or would it only hurt my credit if I was sent to collections or something?

 

[robothouse77]

late payments, i believe, can negatively affect ones credit rating

 

[bella ragazza]

Bad credit?

 

[James Bond]

Originally posted by: robothouse77
late payments, i believe, can negatively affect ones credit rating

I paid my utility bill late last month, but it was literally only late by a couple days.
Edit: That is what I'm sort of worried about
Edit edit: should I be?

 

[robothouse77]

Originally posted by: Tizyler

Originally posted by: robothouse77
late payments, i believe, can negatively affect ones credit rating

I paid my utility bill late last month, but it was literally only late by a couple days.

i don't think they care...you can call and plead with them to wipe that off the records. i did that once w/ my bank. they were cool about it

 

[James Bond]

Originally posted by: robothouse77

Originally posted by: Tizyler

Originally posted by: robothouse77
late payments, i believe, can negatively affect ones credit rating

I paid my utility bill late last month, but it was literally only late by a couple days.

i don't think they care...you can call and plead with them to wipe that off the records. i did that once w/ my bank. they were cool about it

Okay, thanks.

 

[Aimster]

getting loans and paying them off helps credit scores go up

as for down..

changing address
too many credit cards

 

[James Bond]

Originally posted by: Aimster
getting loans and paying them off helps credit scores go up

as for down..

changing address
too many credit cards

Does credit card usage/payment help credit go up as well?

 

[Caesar]

Originally posted by: Aimster
getting loans and paying them off helps credit scores go up

as for down..

changing address
too many credit cards

Interesting that you say that. I also thought the same. Until last month I had 6 CC's. I decided to close 3 of them that I don't use 2 weeks ago. Yesterday I got an alert from myfico that my score dropped 1 point because an account was closed.

 

[James Bond]

Originally posted by: CaesaR

Originally posted by: Aimster
getting loans and paying them off helps credit scores go up

as for down..

changing address
too many credit cards

Interesting that you say that. I also thought the same. Until last month I had 6 CC's. I decided to close 3 of them that I don't use 2 weeks ago. Yesterday I got an alert from myfico that my score dropped 1 point because an account was closed.

Very odd.

I dont think anyone really knows what affects credit

 

[Lord Zado]

I heard having long standing lines of credit helps your credit score. I've seen several "experts" give a tip to keep one credit card in your wallet and never use it. Just have it there as an open line of credit. They said closing old credit cards could cause your score to drop.

 

[Leros]

Pab

 

[DanDrop]

Closing a Credit card that has been open open for a long long time will drop down your credit rating. Try not to close old CC or bank accounts.

Opening too many cc accounts, loans will also lower ratings. Numerous "hard inquiries" to your credit (this is done when applying for loans, credit cards etc) will also lower your rating.

Pay your bills on time, dont close off old accounts and don't open a lot of new CC if you want your ratings to stay high.

 

[TXHokie]

What's the logic behind lowering your score by closing unused CC account? You would think that would make you less susceptible to debt which is good isn't it?

 

[Pacfanweb]

Originally posted by: Tizyler

Originally posted by: robothouse77
late payments, i believe, can negatively affect ones credit rating

I paid my utility bill late last month, but it was literally only late by a couple days.
Edit: That is what I'm sort of worried about
Edit edit: should I be?

No, your credit is only affected if a bill is late by more than 30 days. All paying a few days late will do is probably cause you a late fee.

Other things that can drop your score:
New accounts. Drops until you have some history with that account.
High balances. If you have a bunch of credit cards that are all near the max, they will hurt your score regardless of whether you have paid them on time or not. Too many will kill your score..again, even if they are paid perfectly with no lates.
Pay them down and the score will skyrocket.

 

[DrPizza]

"only a little late" is why your score only went down "only a little". Multiply the number of times you were a little late, by "only a little", and you can put a big ding in your score.

 

[kranky]

Originally posted by: TXHokie
What's the logic behind lowering your score by closing unused CC account? You would think that would make you less susceptible to debt which is good isn't it?

The answer is "utilization" - how much of your available credit you are using. The lower the utilization, the better for your score. Let's say you have three cards - Card A has a credit line of $3,000, Card B has a credit line of $5,000, and Card C has a credit line of $2,000. That's a total of $10,000 in available credit. If you have a balance of $2,000 split between Cards A and C, your utilization is 20%.

Now you close Card B. Your available credit is now $5,000 but your utilization goes up to 40%. ($2,000 balance with $5,000 total available credit) That's going to hurt your score.

I'm oversimplifying a bit, but the point is, don't close accounts. Use your cards at least once a year to make sure the account stays active and open.

 

[her209]

I pay cash for everything I buy. Fvck the credit card companies.

 

[everman]

finance.fatwallet.com has tons and tons of discussion ad-nauseum on this. You should check out some of the "app-o-rama" threads, I'd never do it myself but it's fun to read

 

[kranky]

Originally posted by: everman
finance.fatwallet.com has tons and tons of discussion ad-nauseum on this. You should check out some of the "app-o-rama" threads, I'd never do it myself but it's fun to read

Just a heads up to the OP - if you go over to fatwallet, DO NOT start a thread. Post in the stickied thread called The Financial Forum Question Thread. If you start a new thread, there is a 99.999999% chance there's already a thread on the same topic and you'll get flamed to a crisp for not replying to the existing thread.

 

[DT4K]

Originally posted by: Aimster
getting loans and paying them off helps credit scores go up

as for down..

changing address
too many credit cards

Changing your address will NOT hurt your credit score.
Having too many credit cards is NOT a negative as far as your score. But having too many new accounts is a negative. So if you go out and get 5 new CC's tomorrow, it will hurt your score initially but it will rebound and after a while, it will end up higher than it was before you got those cards.

 

[DT4K]

Originally posted by: DrPizza
"only a little late" is why your score only went down "only a little". Multiply the number of times you were a little late, by "only a little", and you can put a big ding in your score.

Not true at all.
Being a few days late will have NO effect on your score unless the creditor incorrectly reports the account as being 30 days late. If your creditors are reporting accurately, you could be 2 weeks late every single month and all it would hurt is your bank account balance due to late fees. Your credit report will still show those accounts as being in good standing with a status of "pays as agreed".

 

[ChaoZ]

Originally posted by: DT4K

Originally posted by: Aimster
getting loans and paying them off helps credit scores go up

as for down..

changing address
too many credit cards

Changing your address will NOT hurt your credit score.
Having too many credit cards is NOT a negative as far as your score. But having too many new accounts is a negative. So if you go out and get 5 new CC's tomorrow, it will hurt your score initially but it will rebound and after a while, it will end up higher than it was before you got those cards.

So would it be ok if I get a new credit card about every 3 months? I can't resist those $100+ credit offerings.

 

[spidey07]

Originally posted by: DT4K
Not true at all.
Being a few days late will have NO effect on your score unless the creditor incorrectly reports the account as being 30 days late. If your creditors are reporting accurately, you could be 2 weeks late every single month and all it would hurt is your bank account balance due to late fees. Your credit report will still show those accounts as being in good standing with a status of "pays as agreed".

But all your interest rates can go up and you'll be in default if you do to any creditor. Still a very bad idea to be even 1 day late.

 

[IntrinsicValue]

Originally posted by: Tizyler

Originally posted by: robothouse77
late payments, i believe, can negatively affect ones credit rating

I paid my utility bill late last month, but it was literally only late by a couple days.
Edit: That is what I'm sort of worried about
Edit edit: should I be?

It will only effect your credit score if they report it. Understand that, generally, utility companies (i.e. electric and gas) will not automatically report your account to a credit bureau. It usually has to be past-due a couple of months before they send it to collections. If you pay it before they send it to collections and/or report it to the credit bureaus, the late payment won't affect your credit score at all.