Credit score improvement: what to avoid

dots overlay

Credit score improvement: what to avoid


A good credit score can give you peace of mind, financial freedom, better job opportunities and access to credit facilities. But it’s not that easy to improve your credit score. You could in fact be making a lot of mistakes even when you think you are doing the right thing. This article is for you if you want to improve your credit score but are afraid you may go about it all wrong.

By Editorial Team | 15th February 2019
brand main banner

Before you take steps to improve your credit score, you should get a sample credit report to confirm your current credit status. You can get one from credit report providers such as IdentityGuard, myFICO,, Experian and IdentityForce.

That said, avoid making these mistakes…

Opening a new credit card account

While this might sound like common sense, it is still worth discussing because when in dire straits, you may feel the need to grab any credit card offer thrown your way. We advise against this for the following reasons:

  • You will only sink into more debt if you get a new credit card
  • A “hard” inquiry by the credit card provider will reflect on your record and hurt your score even further. How long do credit inquiries stay on your report? 2 years, so you should avoid unnecessary inquiries.
Closing a credit card account

This mistake is quite common. You may think that closing a credit card account that has late payments will better your score. The opposite is true; closing your credit card accounts will hurt your credit score for the following reasons:

  • Your credit score is determined by several factors, including the age of an account. The longer your history, the better. Closing your account shortens this history.
  • You will reduce the credit available to you.
  • Closing a credit card account will raise your credit to debt ratio. A higher utilization ratio is bad for your credit score.
  • It will not erase bad history. Records of closed accounts, such as late payments, still reflect on an account for up 10 years.
Vector hands holding smartphones with credit score app on the screen in flat style
These tips could be the difference between an excellent and a poor credit score (Picture: iStock by Getty)

Don’t close your accounts. Keep them open and make payments so that any late payments go further down your record. There are other ways to remove late payments from a credit report, such as opting for automatic payments, applying for a goodwill adjustment or hiring a professional to negotiate with your creditors on your behalf.

Failing to make payments on all debt accounts

While its smart to prioritize payments, it is not a good idea to do so while neglecting other debt obligations. You may reason that if you concentrate on one debt, you will pay it all off within a few months and lower your debt amount. What will happen, though, is that the other debts you have neglected will still continue to accumulate late payment fees and interest. You might actually end up with a higher debt balance than you started with.

If you prioritize payment on one debt, pay off more than the minimum balance so that you clear off that debt faster. In the meantime, continue paying the minimum balance on the other cards. Once one card is paid off, pick another card to focus on, all the while paying the minimum balance on the remaining ones. You can prioritize cards by choosing high interest ones first.

Filing for bankruptcy

If you are concerned about damaging your credit score further, bankruptcy will only make matters worse. How long do negative items stay on a credit report? Well bad history like late payments and bankruptcy will show on your credit report for 7 to 10 years. Even after that period is up, lenders will ask you if you have ever filed for bankruptcy. This might make it harder to get a loan, or if you do, lenders will charge you high interest rates because they will consider you a risk. You may not even get a credit card in future.

Furthermore, depending on the type of debt you owe, you may not actually be able to avoid all of it.  Property that is not exempt under bankruptcy laws can be sold off to repay some of your debt. You will therefore most likely end up in a much worse situation.

Before you file for bankruptcy, talk to a debt counsellor to advise you of alternative ways to pay your debts.

Doing balance transfers

When you do a balance transfer, you transfer your credit card balances to a new card, preferably one with low interest. Interest on a balance transfer card will still go up after a while. You will only benefit from a balance transfer if you can pay off your entire debt before that happens.

Since a balance transfer involves just moving balances and not taking on new debt, this will not affect your credit score. However, according to Can Arkali, an analyst at FICO, balance changes will reflect in your history and if FICO notice your balances are changing because you have merged your debts into one card, this will affect your credit score negatively.

Other consequences of a balance transfer include:

  • It encourages impulsive spending as opposed to working on your spending habits. If you know you can just overspend and then transfer your debts to another card, you will be tempted to do so.
  • A hard inquiry will be conducted when applying for a card. Hard inquiries/hard pulls can affect up to 25% of your credit score (15% for account age and 10% for new credit).
Credit score report on desk with budget, calculator, pen and glasses
Managing your debt responsibly will improve your credit score (Picture: iStock by Getty)
Giving too much information to debt collectors

Dealing with debt collectors is tricky as they will never act in your best interest. Their job is to collect defaulted debt and they will do anything to achieve this. If a debt collector calls you, remember the following:

  • Ask them to send you their communication in writing.
  • Don’t make a commitment to pay. There is a statute of limitations that governs how old debts are collected. It bars collectors and creditors from suing for old debts. Every time you make a payment, no matter how small, the clock resets, giving creditors and debt collectors more time to sue you.
  • Don’t give them your personal financial information such as bank account details, the value of your property or your social security number. If a creditor gets a judgement against you, this information will be used to collect from you. You should also be mindful of identity theft, so giving your information on the phone is never a good idea. If you have already given out this information, find out how to freeze your credit report and secure your details.
  • Be aware of your situation. Acknowledging that you owe debt might also restart the statute of limitations as a promise is viewed as a contract.
  • Avoid losing your temper, using profanity or being hostile. These factors could work against you in court.

Once debt collectors start calling, assess your finances to see if you can resume payment for your debts. Singing a debt settlement agreement will also put a stop to all calls from creditors and collectors.


Avoiding these mistakes will make it easier to pay off your debts without any incidents that will further lower your credit. After you make payments for a few months to a year, you can order your credit report or access a free business credit report to stay updated with your payment status and current credit score.

Written by
Editorial Team
Our Editorial Team is constantly watching for new and exciting services to report on. They aim to bring balanced, honest reviews to the site to give you the best comparisons and ensure you have the knowledge to choose the product right for you. Read more.
0 thoughts on “Credit score improvement: what to avoid

Leave a Reply

Your email address will not be published. Required fields are marked *. Your comment will have to be approved first and will not appear immediately.