Good credit is important if you want to do stuff like get a loan to buy a car or a mortgage to buy a house. Some employers even check a potential hire’s credit score to see if he’s demonstrated fiscal responsibility. And while (we hope) you know that welching on credit card payments or maxing out your cards are surefire ways to nosedive your credit score, there are also things you probably never would have thought could affect your score. Things like …
#1: Signing Up For In-Store Credit Cards
You really shouldn’t make a habit of signing up for a store’s credit card so you can save 15 percent on chinos. That’s because each time the cashier runs your application for approval, he or she creates an inquiry on your credit report that stays there for two years. Do this enough and credit monitoring companies will declare you irresponsible and drop your score so you’ll be charged higher interest rates when applying for a car loan or a mortgage. Plus, in-store cards tend to have higher interest rates. Besides, those pants make your hips look big.
#2: Canceling Credit Cards With A Zero Balance
If you’re not being charged a fee to keep a card open, just let it be. It’s better to show that you have a paid-off account and no history of delinquency than to have no accounts open at all. Plus, if the card is left inactive long enough, the credit card companies will view your account as a liability instead of an asset since you’re not giving them any money. And then they’ll close them for you.