5 Financial Moves That Can Negatively Impact Your Credit Score

5 Financial Moves That Can Negatively Impact Your Credit ScoreBuilding a good credit score is important for financial success. You’ll need a strong credit rating to secure loans for long-term purchases like a car or a home. The majority of credit scores fall between 301 and 850 with the following ranking:

  • Excellent: 781-850
  • Good: 661-780
  • Fair: 601-660
  • Poor: 501-600
  • Bad: below 500

Although most people’s scores vary over time for many reasons, it is important to try and keep your credit score as high as possible so that when you need credit (to buy a home, for example), you’ll be able to get it at a reasonable rate. To protect your rating, avoid the five following financial activities:

Skipped Payments or Late Payments.

While it’s not unusual to miss an occasional payment, doing so consistently sends a bad message to prospective lenders who view your credit history. When deciding whether to give you new or additional credit, they will check to see if you keep up with current credit payments. Frequently missing payments or making routine late payments raises a red flag. If you must miss a payment or be late, contact the lender to explain why. Chances are any penalties may be waived, including a ding to your credit rating.

Overextended Credit

When exciting credit card offers overflow your mailbox, resist temptation to accept them all. Carefully review all offers’ fine print and compare them to get the best offer. Opening too many credit lines at the same time can make you appear vulnerable to overspending.

Cosigning a Loan

Your intentions are undoubtedly good when cosigning for a friend’s credit purchase. However, your own credit rating hinges on the other person’s ability or commitment to pay bills on time. When a slip-up occurs, you will be held financially responsible, and your credit rating may suffer as a result.

Switching Credit Cards Too Often

It’s hard to pass up a great credit offer, especially one with extended 0% interest and no balance transfer fee. But switching from one account to another too quickly can make you appear financially unstable. Potential creditors may wonder about your ability to actually pay off those transferred balances along with your willingness to make payments when the introductory interest rate expires. Each credit application impacts your credit score, so avoid doing it too often.

Not Reviewing Your Credit History Annually

Everyone should check their credit rating at least once a year by requesting a free credit history report from the three main credit bureaus: Experian, Equifax, and TransUnion. All the scores are slightly different, and they can be obtained for free (yes, really free) from AnnualCreditReport.com.

  • Experian uses the PLUS Score to explain credit scores, along with impact factors and ways to improve scores.
  • Equifax scores range between 280 and 850 to predict credit risks.
  • TransUnion’s TransRisk is a consumer credit score resembling the Fair Isaac Corporation (FICO) score, ranging between 300 and 850.

Organizations like Credit Karma offers free Web-based credit and financial management to American consumers. It offers free updated weekly credit scores and reports.

With a wealth of financial resources like these widely available, make time to review your financial standing by getting a copy of your credit score and ensuring all information is accurate and updated. Lenders will be ready to review your application favorably when you establish and maintain a strong credit rating.

Three Kinds of Good Debt

When it comes to personal finance, most people don’t know that much. You start to notice this when you read personal finance media that’s geared toward the general public. These TV and radio shows, blogs, and websites often try to communicate the most basic principles in just a few words, because most people aren’t going to take a lot of time to think about this stuff. Because the concepts have to be distilled so much, a lot of the nuance can be lost in the process.

One example is debt. The average personal finance talking head communicates thoughts like “Debt BAD! Saving GOOD!”. And while both statements are (sort of) true, there are exceptions and differences in understanding that make such statements irrelevant. Statements like these are supposed to protect people from their own ignorance. If someone takes on debt recklessly, they’ll be in trouble. Putting fear of debt into someone keeps them safe (sort of).

The problem is, there are plenty of examples where taking on debt is a good thing, in the best interest of the borrower. From a financial perspective, there are numerous situations in life where a person will not be able to make the most of their financial situation without borrowing. Financial institutions and governmental legislation collude to make this borrowing among the most affordable on the earth, among other benefits. Quick and easy loans are available, and they can be a very good thing. Here are a few examples.

Mortgage Loans. Buying a home is one of the best ways to build wealth. Most people don’t have enough cash on hand to buy a home outright. So they have to go to a bank or other institution to borrow the money. The government likes homeowners. Homeowners pay their taxes, buy stuff, and generally don’t cause trouble. So the government helps make mortgage loans really cheap. What’s more, homes tend to appreciate in value 4-6% per year. If you’re only paying 3.5% APR on your loan each year, you’re actually growing wealth faster than you’re losing it. This is an amazing example of “good debt”, even if you are $200,000 in the hole for your new house.

Business Loans. As above, the government loves strong businesses. They are essential to the economy, job creation, personal autonomy, that sort of thing. They subsidize business loans and make it possible for new entrepreneurs to take a huge risk on a new business, without having to put their personal assets at risk.

Student Loans. We all know that lots of Americans took out student loans only to find that they couldn’t get a job and pay them back. This doesn’t make them bad. Student loans are a great way to invest in yourself. Like the examples above, the price of student loans is kept artificially cheap, as the government subsidizes the education of its citizens.

These are great examples of good debt. It’s not consumer debt – simply borrowing money to add new pleasures to your life. It’s affordable because these things are likely to make you a better citizen and increase your financial responsibility.

Financial freedom is in your reach with online trading

In this fast paced world, we are all looking to make some quick money, without having to worry about ending up in debt. With this aim in mind, the need for financial freedom has taken precedence over all other matters. As the Internet revolution continues to ride high on a wave of success, the possibility of financial freedom has gone up a notch, especially, when people are beginning to consider the burgeoning success rate of online financial trading.

With respect to a high success rate in the online trading forum, it’s hard to overlook the benefits of investing and trading in binary options. Binary options are no piece of cake; if you are trading in binary options for the first time, and expecting to make a fortune immediately, you need to take a rain check.

With this extensive binary options guide you can get some expert pointers on how to invest in binary options, without incurring heavy losses in the first go itself.

Trading in binary options:

Simplicity in trading, coupled with moderate risk, makes binary options an instant hit with people looking to make some good money. But again, if you are a newbie to the world of trading, it’s best to step forward carefully. However, with a lot of practice, you too can become a pro and start using the trading practices to your advantage.

With binary options, you get to decide how much you want to invest and at the time of investing, you are well aware of the payout amount on maturity. Trading in binary options will help you get a return of around 75-80%, giving you exactly what you are looking for, a solid payback on investment. Since you control the flow of money into the investment, you get to be in charge of how much you invest at all times.

Ways to make some good money with binary trading:

  • Understand trending: Monitoring trends can take you a long way towards making money in the long run. The prices of financial assets rise and fall; as they are impacted by the changes in the financial markets. If the prices are on the rise continuously over a period of time, chances are the asset would grow in the future as well. The same technique can be followed for a price decrease also. Learn to read pattern charts; this will give you a little insight into the pattern being followed by some of the top trending financial assets before you decide on your investment options.
  • Decide on your trading strategy: One common strategy will not work for everyone. You have to devise your own strategy and make it work for you. Put in small investments, every time you change your strategy, so that you can test out what works for you, without losing a fortune in the bargain.
  • Maintain your account with a well established trading app: In order to ensure your investment is in safe hands, you have to be sure to have an account with a broker or trader, who safeguards your investments as their own. If by any chance you don’t trust your broker, it’s best to avoid making the investment.


Getting out of the 9-5 job rut is not going to be easy. But if you become a full time trader, chances are, even this can be achieved, since you work at your own pace and your own terms. The joy of being your own boss cannot be overlooked, since this would even mean that you secure your future with assured returns and a strong sense of financial freedom.

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