Bad Credit

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How to Mess Up Your Credit Score

by Kerri Spencer on November 1, 2010

Your credit score matters, in more ways than you care to admit. It can keep you from getting a job, and it can make you pay more for your car insurance. If you mess up your credit score, you’re going to be in a world of hurt. Unfortunately, that’s what’s happening to lots of folks right now. The global economic crisis has had plenty of credit score victims.

Still, if your credit score isn’t horrible yet, it can be. If you want to mess up your credit score and make sure that no one is going to approve you for a home loan or a car loan or a credit card, here’s what you should do:

  • Pay late. Your bill paying history is the most important part of your credit score. Every time you pay late, you’re going to drop your credit score as much as five to ten percentage points or more. Miss two payments, and you’re  looking at a credit score drop of as much as 15 percent.
  • Get foreclosed. Foreclosures, short sales and other types of ways to dump a home that you owe money on will kick your credit score’s ass. Even if you give up your mortgage and the bank is able to recoup their costs via a sale, you’re still going to see your credit score drop by as much as a third.
  • Max out your credit cards. Charge up your balances, because when you do your creditors see you as a higher risk for default. The best credit scores will involve a ratio of debt to credit limit of 30 percent or less.
  • Close your old accounts. While it’s not nearly as important a factor as your bill paying history, the age of your credit accounts matters to your credit score. If you want to trash your credit score, close out your oldest credit accounts in favor of new ones.
  • Apply for a bunch of new credit. When you apply for a credit card or a loan, you’re going to see your credit score dip by a few points. When you do so excessively, it looks like you’re desperate for cash and creditors consider you a higher risk.

Categories: Credit Score

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Where to Get Cash when Your Credit Score Stinks

by Kerri Spencer on July 21, 2010

We understand. You’re not really a deadbeat, just because your credit score stinks. You’re just an average Joe who got the worst end of the recent financial crisis and recession. You don’t have a lot of marketable skills, and when your factory closed you found yourself on hard times. It happens to the best of folks. Now, when you go to apply for a car loan, home loan or even a credit card, the lender looks down on you as if you’re some lower species.

So, what do you do when you need some money but your credit score stinks? You’ve got a few options:

  • Payday loans. Now, we list these first but that doesn’t mean it’s your best option. Payday loans are a quick way to get cash. They’re also the most expensive way to get cash that we can think of. Payday loans often have interest rates of 300 percent or more.
  • Friends and family. Borrowing from friends and family can be tricky. If the process goes bad, it can ruin a friendship or make Thanksgiving very uncomfortable. If you’re going to borrow money from people you know, try to put some safeguards into the process. The biggest one is honesty. Honestly tell the person when you can pay the money back, and if you can’t do it let them know sooner rather than later.
  • Rob a bank. We’re not advocating crime, of course. However, if you’re smart about it, you won’t get shot when the police capture you and you’ll wind up in prison with three square meals a day.
  • Get a part time job. Look, just because you work 40 hours a week doesn’t mean you can’t work 60. Back in the old days, people used to work from sunup to sun down. Put on your big girl panties and find a way to make some more money.

Realistically, of course, we know that three of these options are viable. Whatever you do, try to avoid that payday loan.

Categories: Advice, Credit Score