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Excellent Credit Score

It takes a lot of time, effort, and financial dedication to achieve an excellent credit score.

Once you reach the top, there’s only one thing on your mind: staying there for the rest of your life.

While it’s difficult to obtain an excellent credit score, it’s easy to destroy it. In fact, if you make even one mistake, it could drag down your score.

Here are five things that can kill your excellent credit score:

1. One Late Payment

Get this: if you make even one late payment, regardless of the type or amount, it can harm your credit score. 

Depending on where your score falls in the excellent range, this late payment could bump you down to the “good” category.

You didn’t achieve an excellent credit score because you made late payments. Stick with the plan that got you here.

2. Constantly Applying for More Credit

One day you apply for a car loan. The next a personal loan. Then you decide to apply for a few credit cards.

It’s okay to apply for credit when necessary, such as when buying a vehicle or house. However, don’t make this a habit. 

Too many hard inquiries on your credit report will drag down your score. 

3. Canceling Credit Cards

If you have a zero-balance credit card, you may get the idea to cancel it. Unless you absolutely need to – perhaps because you have concerns about running up a large balance – it’s best to keep the account open.

When you close a credit card account, you reduce the amount of available credit. Subsequently, your credit score will take a hit.

4. Lack of Credit Diversity

Don’t apply for new credit just for diversity, but definitely keep this in mind in the future.

Credit diversity can boost your score, so seek out new ways to obtain credit when necessary.

For example, rather than apply for another credit card, take out a personal loan. 

5. Credit Report Errors

Check out this excerpt from a recent CNBC article:

“More than one in five consumers have a “potentially material error” in their credit file that makes them look riskier than they are. Lenders respond to this incorrect data by offering you higher interest rates, less favorable terms, or denying credit if the error makes you look too risky.”

You should review your credit report a minimum of once a year for errors. As noted in the paragraph above, an error can impact your finances in many ways, such as pulling down your credit score.

Final Thoughts

An excellent credit score is something to be proud of. It takes a lot of work to reach this level, and it’s not something everyone is able to achieve.

Once you reach your goal of obtaining an excellent credit score, you don’t want to do anything to put it at risk. By avoiding the five mistakes above, you have a better chance of maintaining your score. 

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