top 3 things that can ruin your credit and how to fix them
May 2, 2025
Your credit score is a big deal. It helps lenders decide if they can trust you to pay back money you borrow. A good credit score can help you get a loan, rent an apartment or even land a job. But there are a few common mistakes that can hurt your credit pretty quickly. Here are the top three and what you can do if you find yourself in those situations.
1. Late or missing payments
Payment history his the greatest impact on your credit score. Late and missing payments on your credit card, loans or other bills can damage your credit not just once, but every month if you continue this habit. Lenders report missing and late payments monthly. If you are a repeat offender, your credit score will go down quickly.
HOW TO AVOID IT:
Set reminders on your calendar or phone, or use automatic payments so you don’t forget to pay your bills. Even one missed payment can stay on your credit report for years. Also, don’t use credit cards if you can’t afford the items you’re purchasing.
HOW TO FIX IT:
If you’ve missed a payment, pay it as soon as you can. Call your lender and ask if they’ll remove the late payment from your record—it doesn’t always work, but it’s worth a try. Most importantly, get back on track and make sure it doesn’t happen again. If you can’t make the payment because you can’t afford it, call your lender and make payment arrangments so they know you are trying.
2. using too much credit
If you’re using most or all of your available credit and credit limits, your credit score can take a hit—even if you pay on time. This is called your credit utilization.
HOW TO AVOID IT:
Try to keep your credit card and loan balances below 30% of your credit limit. For example, if your credit card limit is $1,000, keep the balance under $300.
HOW TO FIX IT:
Pay down your credit cards as much as possible. You can also ask for a credit limit increase—but only if you won’t be tempted to spend more.
3. closing old accounts
It might seem smart to close a credit card you don’t use, but it can actually lower your credit score. That’s because it shortens your credit history and changes your credit usage.
HOW TO AVOID IT:
Keep older accounts open, even if you don’t use them often. Use them for small purchases and pay them off immediately to keep them active.
HOW TO FIX IT:
If you’ve already closed an account, don’t worry—it won’t hurt forever. Focus on keeping your remaining accounts in good standing and making smart credit choices moving forward.
Bad credit doesn’t have to be forever. By making smart choices and staying on top of your payments, you can build—or rebuild—a healthy credit score. And if you ever need help understanding your credit, AlliedFCU is here to help.
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