What Causes a Low Credit Score?

Using credit is a way to take out loans, apply for a credit card and even become approved for a mortgage when investing in real estate of any kind. If you are thinking of asking for a loan or if you are applying for a rental, mortgage or a credit card to help with building your credit, it is important to check up on your current reported credit scores to ensure you have good credit. If you have a low, or bad credit score, it will be much more difficult to seek out potential lenders and banks willing to provide you with credit cards, a car you want to lease or a mortgage for a new home you are interested in. There are many causes for a low credit score which can help you to fix any issues you may have with finances in your life currently (see related - Tips for Improving Low Credit Scores).

Making Payments Late

When you have a credit card bill or a bill of any kind that you pay late, you may find that it has been reported to a credit bureau, impacting and potentially lowering your overall credit score. Making your payments on time, however, will help to boost and build your credit over time, increasing the credit score itself.

Avoiding Payments

Avoiding payments of bills altogether can be overwhelming and stressful on your part, but it can also negatively impact your credit score as well. If you are unable to make a payment on an upcoming bill, speak directly with the company or with creditors yourself to minimize the penalties you face with your credit scores.

Too Many Credit Cards

Although many credit card companies enjoy giving out credit cards to just about anyone, it can be risky if you are spending unwisely and not paying your bill on time. By avoiding letting your credit card activity get out of hand, and doing your best to pay off your credit card balances as quickly as possible, you will never have to concern yourself with potential negative effects of credit cards.