Your credit report contains financial and personal information that is used to establish your credit score or rating. It is determined by your personal information, including your demographics, as well as other data, such as the kinds of credit providers you have used and the total amount of credit you have drawn.


Because lenders use this score to determine if you are a good risk for a loan, it is significant. Your credit score influences a number of things, including your eligibility for loans for a car, house, or education. It may even have an impact on some job applications.

You might be surprised to learn how simple it can be to receive negative marks on your credit record, which lower your credit score. These are a few behaviors that can lower your credit rating:

1) Too many credit enquirers
Shopping around for a credit card or transferring balances may seem like wise decisions, but they can have a negative impact on your credit score. A large number of credit inquiries indicates to lenders that you are experiencing financial hardship and are turning to credit to get by. Each time you apply for credit, you authorize the lender to look up your credit history and make a public inquiry. Regardless of whether you obtain a credit card or loan from the creditor, these entries stay on your credit report for five years. Try to compare prices first and wait to submit an application until you have selected a lender.

2) Defaulting on repayments
Your credit score is also impacted when you fail to pay your bills and credit cards on time. A bill may be recorded as a default to a credit reporting agency if it is over $150 and unpaid after 60 days. For lenders, defaults are serious red flags. Even if the default is settled, they still place a negative note on your credit report that can last for five years.

3) Minimum payments
Lenders may conclude that you are experiencing financial hardship if your credit card balance is high (more than 30% of your credit limit) and you only make the minimum payments. This will raise red flags for lenders as well, and your loan application will probably be denied.

4) Cash advances
Receiving cash advances on your credit card serves as another clue to creditors about your financial difficulties. Furthermore, these advances usually come with extremely high interest rates, so you should only use them as a last choice for serious crises.

5) Co-signed loans

Having more debt raises your debt-to-income ratio, which deters lenders from lending to you. Prospective lenders will still view you as the debtor if you co-signed a loan for a loved one, even if you are not making the payments. In the event that the debtor defaults on the loan or fails to make payments, these negative marks may still appear on your record. Before you agree to co-sign someone else’s loan agreement, give it some thought.