Thu 12 Nov 2009
5 ways to kill your credit score
Posted by lizweston under Liz's Blog
[3] Comments
FICO finally parted the curtains enough to show us how much effect certain actions–late pays, maxing out, debt settlement, bankruptcy and foreclosure–can have on credit scores. You can see my column about this at MSN Money (CLICK HERE), but here’s a taste:
| Prior score: | ||
|
680 |
780 |
|
| Maxed-out card |
650-670 |
735-755 |
| 30-day late payment |
600-620 |
670-690 |
| Settling debt |
615-635 |
655-675 |
| Foreclosure |
575-595 |
620-640 |
| Bankruptcy |
530-550 |
540-560 |
3 Responses to “ 5 ways to kill your credit score ”
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[...] 5 ways to kill your credit score » Ask Liz Weston [...]
I did something dumb. In order to get a 0% interest credit card I agreed to reduce my limit on another account from $47,500 to $20,000 so the same bank would issue $5,000 limit card with a twelve month intro rate (I’m currenty doing major necessary renovations on my home.) How badly will this reduction of credit affect my credit score and is there any thing I can do for damage control? My credit score is typically in the 730 range.
Lowering limits can hurt your scores, but it’s hard to predict how much. If you can get your credit utilization below 10% on all your cards, you likely could offset the damage, but I’m guessing that $5k card will be pretty close to maxed out from the start.