NEW YORK (MainStreet) — Creditors are still skittish about lending these days, and for borrowers looking for credit, job one is not to do anything that will chase those lenders away. A good place to start is to note the following five items on your credit report that are guaranteed to drive off creditors.
- Applying for multiple credit cards at the same time. Creditors just hate it when consumers apply for multiple credit cards in close succession. To them, it increases the risk that you’ll accumulate more debt that you won’t be able to pay back. Keep it simple, and only apply for one card every year.
- Spacing out credit applications. The way credit agencies work, you’re better off bundling multiple loan requests into one two-week period. Say, for example, that you’re applying for a student loan and are also considering a new credit card. By “bundling” them into one two-week period, it will only count as one inquiry in the credit scoring model, which will be better for your credit score.
- Co-signing a loan. Creditors will treat a co-signed loan just as seriously as any other loan. That means that if you’ve co-signed a loan, and the loan recipient doesn’t pay up, you’ll get hung out to dry on your credit report.
- Making only minimum payments. Lenders don’t like it when you repay your debt with just minimum payments. It shows them that they may have a hard time getting their money back, and that you have additional financial pressure that may lead you to default on a loan.
- Too many fines and fees. Local governments are really socking it to people in situations where they can get a little revenue. Late fees for things like overdue library books or delinquent parking tickets now can go to collection agencies, which in turn can hurt your credit score. Don’t treat municipal fines lightly--even a $30 fee for an overdue library book can trash your credit.