Top Insurance Companies

You already know how important your credit score is. A swing of 20 points up or down can be the difference between a great rate and an expensive rate on a mortgage or a car loan… or even no loan at all. To prevent this from happening, you need to avoid the major credit score killers.

Some credit usage and repayment behaviors -- whether the result of an unavoidable financial squeeze or a choice you make -- can drive your score down before you can say "plastic." Beware these big credit score killers:

1. Late payments. Yes, a pattern of late payments can devastate your score, but did you know that even a couple of missed due dates can make a big difference? Know when bills are due, and double-check that your payments were received on time.

2. Applying for too many cards. You may have good reasons -- finding a better balance transfer rate or irresistible rewards. But lenders may see those applications on your credit history and think you're in desperate need of fast cash. Just like in romance, desperation won't increase your chances of success.

3. Not using credit cards. It seems counter-intuitive, but your score will be higher if you show a consistent history of borrowing and repaying money -- like you do when you charge on your card and repay each month.

4. ...Or relying on them too much. Having high balances on your cards tells lenders that you probably don't have a ready supply of cash or resources if you face a financial setback.

Sometimes avoiding credit score killers is a matter of finding the right credit card for your current needs: one with a low or zero percent introductory APR, a credit card that lets you consolidate balances with lower interest, or a card that gives you rewards for spending on everyday purchases. Take the time to compare the credit card offers available to you, and keep your credit score in the black.