7 surefire ways to damage your credit ratings

Your credit rating tell the banks about your financial situation and debt repayment capacities. Credit rating companies keep a track of many things like how many time you defaulted on your payments, were they on time, how many times you paid late and how well you are on your debt repayments. Based on these factors they prepare your credit rating over a period of time.

The importance of a good credit rating can't be understated. Sometimes, the difference between an excellent credit rating and a poor one could be getting a 0% APR deal on that credit card or being declined out rightly or paying APR's that shoot through the roof. . Due to poor credit ratings, which is usually caused by high credit card debt it will surely be very difficult qualify for any loan with a decent interest rates and lenient repayment terms.

1. Credit ratings can take a downward jump suddenly or can decline over time. There can be many reasons for this decline. Here are a few of them.
   
   A job loss with no other source of income can have drastic impact on your finances, and if you are not financially secure the over dependence on credit cards for funds can decrease your credit ratings.
2. A sudden illness and huge medical bills with no financial backup is a big cause for decline in credit ratings.
3. Though bankruptcy settles debt, but it has a very negative impact on your credit rating. And it shows for10 years on your credit history thus driving the potential lenders away.
4. Unless you are very rich and can absorb the financial impact of a divorce, it can severely damage your credit rating because of the huge alimony and other payments.
5. Paying your credit card bills or loan installments after due date will cost you in terms of credit ratings, though you might never have defaulted on the repayments.
6. If you apply too frequently for credit cards in a 12 month period and constantly juggle your outstanding balances with 0% Intro APR credit card offers, your credit rating will decline.
7. If you have a habit of just paying the monthly minimum on your credit card outstanding balances, you are shooting yourself in the foot. This is the costliest method to repay credit card debt and will surely have a negative impact on your credit ratings.

Credit rating, is a very very vital part of our lives and by having a good credit rating we ensure that, we are good risk to lenders .Keeping the repayment schedule with timely repayments and staying within budget will avoid any credit card debt and keep the credit ratings at the top.