10 Behaviors That Hurt Your Credit Score

Are you as clueless as most people about what makes a difference?

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Do you know the top 10 financial behaviors that can hurt your credit score? It turns out that most people don’t – especially parents. According to a new survey by ING Direct, only five parents out of 1,042 could correctly identify the following behaviors as damaging to credit scores.

  1. Keeping a small credit card balance each month
  2. Lowering your credit limit
  3. Closing old credit card accounts
  4. Opening new credit card accounts
  5. Never having a credit card
  6. Having a short history of credit
  7. Exceeding a credit limit
  8. Having a lot of debt
  9. Paying a mortgage late
  10. Paying bills late
  11. Parents weren’t totally clueless – over 80 percent knew that paying bills late or paying a mortgage late could dink their scores, and seven in 10 correctly named “exceeding a credit limit” as a bad idea. But keeping a small credit card balance and closing old accounts largely flew under the radar.

    Parents also tended to incorrectly think that recommended behaviors, such as checking their credit scores and accessing their credit reports, would hurt their scores. But those are just the steps parents – and all consumers – should be taking to make sure their reports are error-free. After all, those credit reports and scores determine how expensive it is to take out loans.

    ING Direct says parents have an extra responsibility to educate themselves, since they’re setting an example for their children. The bank recommends teaching kids about money as soon as they start asking you to buy things for them. One tip? “Show them your credit card statement and explain that credit cards are not 'free money.' Talk to them about interest rates and why paying off your balance in full is important.” (ING’s website Planet Orange helps get the conversation going.)

    Parents, how do you teach your kids about money?