More than a third of all Americans have a credit score below 670, according to Experian. And many don’t realize what’s hurting their credit until they’re denied a loan or hit with higher costs.
Your credit score can impact your ability to refinance, rent, switch insurance providers or even help loved ones by cosigning on a loan. Even if you’re in your 50s, 60s, or 70s and don’t plan to borrow again, your credit still matters.
The good news? Many credit pitfalls are avoidable once you know what to watch for. Here are nine things you might not know can hurt your credit score, according to a panel of financial experts.
How credit scores work
When assessing the credit risk of taking you on as a borrower, most lenders will use your FICO scores, which ranges from 300 to 850.
Your FICO is based on five key factors:
Payment history (35%) — Do you consistently pay your bills on time?
Credit use (30%) — How much of your available credit are you using?
Age of credit history (15%) — How long have the accounts in your credit file been open?
Credit mix (10%) — Are you successfully managing different types of credit and personal loans, like credit cards and other revolving credit as well as installment loans, like auto loans?
New credit inquiries (10%) — How often do you open new accounts?
Generally, a score above 670 is considered good. But the higher your score, the more doors it opens — and the more money it can save you.
At a glance: FICO scores | |
Poor | 300 to 579 |
Fair | 580 to 669 |
Good | 670 to 739 |
Very good | 740 to 799 |
Exceptional | 800 or higher |
Source: myFICO | |
1. Canceling old credit cards (even if they’re paid off)
If you’ve paid off a credit card and don’t use it anymore, it might seem smart to close the account — fewer bills, fewer risks, less to keep track of. But closing a card, especially one you’ve had for a long time, can actually hurt your credit.
“Your credit history length is a major factor in your score, and older accounts hold serious weight,” says Alex Shekhtman, CEO and founder of LBC Mortgage. “I’ve had clients in their 60s close a card they opened in the ’90s because they didn’t use it anymore, only to watch their credit score drop by 40+ points.”
That’s because credit scores reward consistency and long-term management. Closing a card can shorten the average age of your credit and reduce your total available credit — both of which can ding your score, especially if you carry balances on other cards.
“As we close down accounts, this reduces our available credit, which potentially raises our credit utilization rate,” says Sara Griffin, financial coach at Sip Into Savings. “And when we start closing accounts that are our longest-standing, we risk reducing our credit length. That combination can negatively impact 45% of the credit score equation.”
🎯 What to do instead
Keep your old cards open, even if you don’t use them often. You can set a recurring charge — like a streaming subscription — and automate the payment. That keeps the card active without much effort.
🔍 Learn more: Do credit scores matter after you retire?
2. Cosigning on a loan or credit card for a loved one
Cosigning for a loan feels like the right thing to do, especially if you’re helping a child or grandchild get their first car, rent an apartment or build credit. But it’s one of the riskiest moves you can make for your own credit score.
When you cosign, you’re not just vouching for someone: You’re legally responsible for the loan. That means if they miss a payment or rack up a balance they can’t repay, your credit takes the hit.
“Even a late payment of just 30 days will hit your credit report and can stay on it for up to seven years,” says Bobbi Rebell, CFP® and personal finance expert. “In many cases that debt will also be tied to your profile and can hurt your debt-to-income ratio.”
And it’s not just missed payments that can cause problems.
“Even if the payments are made on time, it can raise your debt-to-income ratio, which can affect your ability to get approved for future loans or credit lines,” says Shekhtman. “It’s a kind gesture, but it needs to be approached like a business decision.”
That’s especially true if you’re hoping to refinance a mortgage, qualify for a HELOC or apply for new credit of your own.
“Some of my older clients who worked for years to build great credit suddenly found themselves starting from scratch,” says Leslie H. Tayne, Esq., a finance and debt expert and founder of Tayne Law Group. “Some even faced legal consequences because they cosigned for someone who wasn’t financially prepared to handle a large debt.”
🎯 What to do instead
If you still want to help, consider alternatives like gifting cash or making payments directly to the lender without attaching your name to the loan. It’s possible to be generous without putting your own credit at risk.
🔍 Learn more: Should you cosign a loan for your child or a loved one? A guide to risks and rewards
3. Missing a payment — even once
Life happens: You forget a bill. You’re in the middle of a divorce. You’re juggling a medical emergency. One late payment might not seem like a big deal, but when it comes to your credit, it absolutely is.
“Nearly two-thirds of your credit score is determined by just two factors: payment history and how much you owe,” says Howard Dvorkin, CPA and chairman of Debt.com.
That’s why even a single missed payment can drop your score by 50 to 100 points or more, especially if your credit was otherwise in good shape.
And if you’re going through a crisis — like a health scare or the loss of a spouse — it’s easy for bills to fall through the cracks.
“When we are in distress, finances can become a lower priority,” says Rebell. “It is essential that we put systems in place ahead of time to keep our finances on track when life gets in the way.”
🎯 What to do instead
Set up automatic payments for at least the minimum amount due on all credit accounts (preferably for the full statement balance). That way, even if you’re sick, traveling or grieving, your payment history stays intact. If a life event throws your finances off course, call your lenders right away — some may offer hardship programs to keep your account in good standing.
🔍 Learn more: 5 popular budgeting strategies — and how to find the best fit to motivate your finances
4. Paying off a loan early
Paying off debt feels like a win, and it usually is. But in some cases, paying off a loan early can cause a small, temporary dip in your credit score.
“Paying off a loan like an auto loan or student loan early removes an active account with a positive payment history, which reduces your credit portfolio and length of history,” says Casey Brueske, community education development specialist at PenAir Credit Union.
Credit scores reward a mix of active, diverse accounts. So closing a loan early reduces your account variety and may shorten your credit history — both of which can nudge your score down.
“This is not a reason to avoid paying it off early,” Brueske adds. “It’s just something to consider if you’re looking to apply for a new credit line.”
🎯 What to do instead
If you’re close to a big financial move — like applying for a mortgage or refinancing — talk to your lender or a certified financial advisor first. Otherwise, go ahead and pay it off. Just know your score might dip slightly before it bounces back.
🔍 Learn more: Should you pay off your mortgage early? 5 top factors to consider first
5. Carrying a credit card balance (on purpose)
There’s a persistent myth that carrying a balance on your credit card account helps your credit score. But in reality, it can actually do the opposite.
“Many people mistakenly believe that they need to carry a balance on their credit cards month to month in order to maintain or improve their credit,” says Tayne. “The truth is that carrying a balance does not improve credit, and can actually lower your credit scores depending on a number of factors.”
That’s because your credit utilization ratio accounts for 30% of your FICO scores. The higher your balances, the worse your credit use looks to lenders.
Even if you pay on time, maxing out a card (or getting close) can still cause a drop in your score.
And remember: You’ll also pay interest on that balance, which can add up fast — especially if you’re nearing or in retirement and trying to reduce monthly expenses.
🎯 What to do instead
Use your credit cards regularly, but pay them off in full each month. That keeps your accounts active and your utilization low, while helping you avoid interest. If your balances are high, focus on paying them down.
🔍 Learn more: How to pay off your credit card debt: A game plan to break free from your balance
6. Only paying the minimum due
If you’re making the minimum payment on your credit cards every month, you’re technically staying current. But over time, that strategy can quietly hurt your score and your finances.
“One of the common mistakes I see regularly is people simply paying their minimum balances each month and continuing to add to their debt,” says Griffin. “We think that this is the right thing to do because as we pay our minimum dues, that’s meeting the obligations stated in the bill that need to be paid. But even if you pay your statement in full every month, you’re still showing you’re responsible with your money and credit use.”
It can also cost you a lot more in the long run. Depending on your interest rate, it could take years to pay off a moderate balance if you only make the minimum due — even if you never miss a payment.
🎯 What to do instead
If you’re carrying balances, pay more than the minimum whenever you can — even an extra $50 a month can make a meaningful dent.
🔍 Learn more: Debt snowball vs. debt avalanche: Which is best for getting control of your debt?
7. Ignoring your credit in retirement
If you’re not planning to borrow money again, it’s easy to think your credit score doesn’t matter in retirement. But letting your credit go dormant in retirement can create problems, especially if life throws you a curveball.
“The biggest mistake retirees make about their credit is believing they no longer need it,” says Dvorkin. “They might think they’ve purchased their last home and their last car. But what if they decide to move? What if their car suddenly dies? A healthy credit score can save — or cost — them thousands.”
Closing accounts or letting them sit unused for years can shorten your credit history and reduce your available credit, which may lower your score. And if you do need to borrow down the road — to refinance, open a home equity loan or even cosign for a loved one — you could face higher rates or flat-out denial.
“Credit scores are like muscles: They can weaken if you don’t exercise them,” Dvorkin says.
🎯 What to do instead
Use your credit cards periodically — even just for small recurring purchases — and set up automatic payments. Check your credit reports annually and consider freezing your credit if you’re not applying for anything soon. It protects you from fraud and keeps you in control.
🔍 Learn more: 5 simple steps to clean up your credit (and avoid a credit repair scam)
8. Divorce and joint debt
Divorce is already an emotional and logistical minefield. And unfortunately, your credit score can get caught in the crossfire.
“Even if a divorce agreement assigns debt to one party, joint accounts typically remain in the names of both parties,” says Brueske. “If your ex misses a payment, your credit may suffer.”
That’s why it’s critical to separate your accounts legally, not just emotionally. If a vengeful or struggling ex runs up debt or stops paying, you could be left with the bill, a damaged score — or both.
🎯 What to do instead
Before the divorce is finalized, work with your attorney to close or refinance joint accounts into one person’s name. Monitor your credit closely afterward to make sure no joint debts are lingering. And if you’re not sure what’s still active, pull your credit reports and look line by line.
🔍 Learn more: Joint bank accounts: The pros and cons for every stage of life
9. Letting accounts go inactive
If you’ve worked hard to pay off your debt, it might feel like the responsible move to tuck away your credit cards and forget about them. But letting an account sit idle for too long can quietly damage your score.
“If you have credit cards gathering dust, they might get closed out due to inactivity,” says Dvorkin. “That can lower your credit score, especially if you’ve had those cards for years and made prompt payments on them.”
When a lender closes your account, it reduces your available credit, which can spike your credit utilization ratio and shorten your credit history — two major components of your score.
🎯 What to do instead
“Keep old accounts open and use them periodically to maintain their activity,” advises Brueske. “This will help maintain both your credit limit and your credit history.”
🔍 Learn more: 4 hidden credit card benefits and protections most people ignore
How bankruptcy and foreclosure affects your credit
Some credit hits are recoverable in a few months. Bankruptcy, foreclosure and repossession aren’t among them.
These are major negative marks that can stay on your credit report for up to 10 years. That kind of damage can make it harder to qualify for new credit, buy a home or even rent an apartment.
But here’s what’s important to know: They’re not permanent. And they don’t mean you’re financially doomed.
Bankruptcy wipes out certain debts you can’t repay. It tanks your score at first — but also gives you a clean slate to rebuild from.
Foreclosure happens when a lender seizes your home due to missed mortgage payments. It dramatically impacts your score and often limits your ability to buy again for several years.
Repossession usually applies to vehicles. If you stop making payments, the lender can take back the car, and the account will be marked “repossession” on your report.
Even if you’re facing one of these situations, the way you rebuild afterward makes all the difference.
🎯 What to do
Start with small steps:
Make on-time payments moving forward (even on a secured credit card).
Check your credit reports to ensure everything is accurate and falls off when it should.
Don’t rush to open new accounts — focus on stability first.
🔍 Learn more: How to avoid bankruptcy in retirement and safeguard your golden years
Factors that don’t affect your credit
Contrary to popular belief, there are a few things that don’t actually matter to your score.
Checking your own credit. “Many believe checking your credit on your own will hurt your credit,” says Brueske. “However, this is what is called a soft inquiry and has little to no impact on your overall credit score.” In fact, regularly reviewing your credit reports is one of the best ways to catch errors or fraud early.
Your income or age. Credit reports don’t include your income, job title or age. Lenders might consider those when deciding to approve you, but they don’t influence your actual score.
Utility or rent payments (with a positive caveat). Most rent, water, power and internet payments don’t show up on your credit report unless you miss them and the account goes to collections. That said, some tools like Experian Boost let you opt in to showing lenders reliable payments.
Using debit cards instead of credit cards. Debit card use isn’t reported to the credit bureaus at all. Only credit behavior affects your score.
🔍 Learn more: 5 places you shouldn’t use your debit card (and 3 situations when you should)
4 steps you can take to clean up your credit |
✅ Step 1: Check your credit reports Go to the federally authorized AnnualCreditReport.com to access all your credit reports from the three major credit bureaus — Equifax, Experian and TransUnion — for free. “Create an account with each of the three credit reporting agencies and freeze your credit,” suggests Griffin. “Then monitor your credit report regularly, ensuring information is accurate and disputing anything that isn’t.” A credit freeze can protect you from fraud, and you can lift it anytime you need to apply for credit. ✅ Step 2: Dispute any errors Mistakes happen, and they can cost you points. If you spot anything incorrect — like a loan repayment marked late when it wasn’t or credit applications you didn’t make — file a dispute with the credit bureau reporting it. They’re required to investigate within 30 days. ✅ Step 3: Pay bills on time This is the single most important thing you can do for your score. Consider setting up automatic payments or calendar reminders to stay on track, especially for credit cards and loans. ✅ Step 4: Lower your credit utilization If your credit cards are maxed out (or close), try to pay them down. “Keeping a balance of utilization under 30% will help prevent your score from dropping,” says Tayne. And if you can swing it, paying your cards off in full each month is even better. |
How to tackle or pay down your debt
If high-interest debt is dragging down your credit score, you’ve got options. “You want to start eliminating debt and reducing credit utilization to help increase your credit score and overall financial well-being,” says Griffin.
Here are a few ways to start making progress:
Focus on one card at a time. You could try either the debt snowball or avalanche method to help you pay off debt.
Consolidate with a lower-interest loan. A debt consolidation loan or 0% balance transfer card can simplify payments and reduce interest, but only if you stop adding new debt.
Talk to a nonprofit credit counselor. They can help you create a plan, negotiate lower rates, or set up a debt management program (DMP) that keeps you on track.
Avoid closing paid-off cards. It might feel like a clean break, but keeping them open can help your utilization ratio and credit history.
The most important part is to just start. Progress builds over time, and every dollar you pay down puts you in a stronger financial position.
🔍 Learn more: Debt consolidation vs. debt payoff vs. debt counseling: What’s the difference?
FAQs: Your credit score and strengthening your finances
Learn more about how your credit affects your finances and ways to keep your money safe with these common questions. And take a look at our growing library of personal finance guides that can help you save money, earn money and grow your wealth.
Does your credit score really matter if you’re not planning to borrow money?
Yes. Even if you don’t need a loan or credit card, your credit score can affect things like insurance premiums, rental applications, and even your ability to co-sign for a loved one. It’s also a safety net if unexpected expenses arise and you need a loan.
Can closing old credit cards hurt your credit score?
Yes. Closing old accounts reduces your available credit and shortens your credit history — two factors that can lower your score, especially if you still carry balances on other cards.
How long does a late payment stay on your credit report?
A late payment can stay on your credit report for up to seven years. However, the impact lessens over time, and consistent on-time payments can help your score recover faster.
How do I know if I’ve been a victim of identity theft?
If you see unfamiliar accounts, hard inquiries or missed payments you didn’t make, it could be a sign of fraud. That’s why it’s important to monitor all three credit reports regularly and freeze your credit if you’re not applying for anything soon.
If you suspect you might be a victim of identity theft, report it at IdentityTheft.gov. Backed by the Federal Trade Commission, this site can help limit the damage of ID theft and provide support to recover more quickly. You can also submit a report if you think your information was exposed in a recent data breach.
Learn more tips in our guide to safeguarding your financial information and identity online.
What’s the fastest way to improve your credit score?
Paying down high balances and making on-time payments going forward are two of the most impactful actions you can take. You may also see a boost by correcting credit report errors or asking for a credit limit increase (without taking on new debt).
Sources
What is the average credit score, Experian. Accessed June 23, 2025.
What is a good credit score, myFICO. Accessed June 23, 2025
How long does a bankruptcy appear on credit reports? Consumer Financial Protection Bureau. Accessed June 23, 2025.
About the writer
Cassidy Horton is a finance writer who specializes in banking, insurance, lending and paying down debt. Her expertise has been featured in NerdWallet, Forbes, MarketWatch, CNN, USA Today, Money, The Balance and Consumer Affairs, among other top financial publications. Cassidy first became interested in personal finance after paying off $18,000 in debt in 10 months of graduation with an MBA. Today, she’s committed to empowering people to stand up and take charge of their financial futures.
Article edited by Kelly Suzan Waggoner
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