What Hurts Your Credit Score Most? Key Factors

Missing a payment is often the most damaging thing you can do to a credit score. A payment reported as 30 days late can cause a substantial drop, especially if your credit history was otherwise clean. More serious delinquencies, accounts sent to collections, and defaults can add to the damage.

If you are struggling to pay, contact the lender before the due date and ask about your options. Set up payment reminders or automatic payments for at least the minimum due. If a late payment has already been reported, bring the account current and keep making on-time payments; its impact generally fades over time.

Credit utilization—the portion of your available revolving credit that you are using—is another major factor. A card that is close to its limit can hurt your score even when every payment is on time. Balances across all your cards matter, and a nearly maxed-out individual card can also be a problem.

Paying down card balances is one of the more direct ways to address this factor. Because card issuers typically report balances periodically, a lower reported balance may help sooner than waiting for an old late payment to lose influence. Avoid charging the balance back up if you are preparing to apply for a loan.

Check the listed dimensions for high credit card balances can pull a score down quickly against the available vehicle space before use.

Bankruptcy, foreclosure, and accounts in collections can seriously damage credit because they signal that debts were not repaid as agreed. Applying for several new credit accounts in a short period can also lower a score, though a single hard inquiry usually has a smaller effect than a missed payment or heavy card debt.

If you are planning to buy a car, check your credit reports for errors, dispute inaccurate information, and focus first on overdue accounts and high balances. The Smart Strategies to Boost Your Credit Before Buying a Car – eBook Guide for Improving Your Credit Score is a related resource, while this overview of what brings a credit score down can help you prioritize the factors that apply to you.