Personal Finance 

Six Ways to Kill Your Credit Score

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Feasting LionsSomewhere out there in the wild is a credit score with your name on it. It’s wandering the plains, being scoped by employers and lenders, seeing if it makes you worthy of a job or a loan. Perhaps you’ve even seen it, maybe once a year as the government would prefer, or perhaps you’ve just lived blissfully ignorant of what your little score has been doing all by itself. Well today I’m going to tell you six ways you can try to trap your credit score and kill it. I don’t mean hurt it a little, knocking it down a few points, I mean absolutely crush it so that it will be years before it can spread lies about you. I can guarantee that with these tips your credit score will never be the same.

Invariably someone will not recognize the sarcasm in this post so here’s the warning, prominently front and center: This post is a joke. If you do this and tank your score, I am not responsible because I’m telling you right now that by doing these six things you will lower your credit score and endanger your ability to get a loan, job, insurance, or cell phone in the future.

Let’s go credit score hunting!

Go On an App-O-Rama

An app-o-rama is a term I picked up on the Fatwallet Finance forums that goes back many many years. Back in the days of credit card arbitrage, you could apply for a lot of 0% balance transfer credit cards in a single day to amass as large a credit limit as possible. The strategy worked because by applying in a single day, there wasn’t enough time to update your credit report. You could be applying for your 12th credit card and your report would look inquiry free. Your credit would be significantly lower once all the inquiries and new credit lines appeared but by then you’d have amassed a ton of credit.

While this strategy probably isn’t as crazy today, it’s certainly a strategy you can use to trash your credit (inquiries account for around 10% of your score) and give you even more power to execute this next way to trash your score.

Go On A Spending Spree

This is by far the easiest way to tank your credit score but it requires that you not only go on a spending spree but fail to pay it back. See, if you go on a spending spree and then pay the balance in full, it won’t hurt your score that much. If you max out your cards, you increase your credit utilization temporarily, which is bad, but it goes back to “normal” once you pay off your debt. You need to max them out and just pay interest, that way the percentage of your total limit is as high as possible.

Kill or Reduce Your Credit Lines

Once you’ve maxed out your credit cards, start asking to have the limits reduced. If you have cards you haven’t maxed out, cancel them. The key here is to get as many of your cards to 100% as possible, so dropping limits after you make the minimum payments is the easiest way to do that (unless you just want to buy more stuff). If you have really old cards that you just don’t like anymore, you can cancel those too. The longer your history, the better your score, so you can nip that in the bud by killing off old cards. It won’t have an immediate effect but it will have one if you wait long enough.

Pay Off Non-Revolving Debt

If you have a car loan, try to pay it off. Student loans? Get rid of them, they’re only helping your score (unless you stop paying, but you want to keep your car right?) because having a good mix of different credit types helps. By having only unsecured revolving credit, like credit cards, you hurt your score by not having a good mix of different types.

Miss A Payment for 60+ Days

Most credit card companies won’t report a missed payment until it’s 60 days late and payment history makes up about 35% of your score. Sixty days can be a long time but if you’re patient it’ll be here sooner than you know it. By missing a few payments, the misses start appearing on your credit report and will lower your score, more so if you’ve been keeping a pretty tight ship before then. If you really want to go all out, just stop paying your bills and eventually they’ll go into collections – which remain on your report for years. Getting something put into collections is probably second only to going bankrupt in terms of “bad” things you can do.

Declare Bankruptcy

This is actually really hard but, if you’re successful, it is the holy grail for credit score trashers. Bankruptcy is hard because you will usually be required to go to counseling beforehand and then there’s the whole bureaucracy aspect of filing the proper documents with the court. You can go for either Chapter 7 or Chapter 13, both will hurt, but Chapter 7 is worse. Chapter 7 is the liquidation variety, where you are forced to sell a bunch of your stuff, but both remain on your credit report for 7 years from filing. They lose their potency after a few years but remain on the list for the seven. Oh, and in an ironic twist, these cost money so remember to budget for it.

There you have it, six ways to kill your credit score. If you have any good tips on hunting down this elusive beast, please share them in the comments!

(Photo: jeffonsafari)

{ 19 comments, please add your thoughts now! }

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19 Responses to “Six Ways to Kill Your Credit Score”

  1. Good article. Actually I never thought about applying for more than one credit card in a day, that is an interesting thought.

    With the internet, I hope people are becoming more informed about the importance of a credit score. With the many ways to monitor it, there is no reason not too.

  2. Shirley says:

    At one point many years ago we took out a CC with a zero balance transfer for nine months to consolidate a son’s many outstanding debts. Close to the end of the promo time when the balance had been greatly reduced (by him) but not paid in full, we did it again with another CC and closed the original. Repeat the same twice more.

    Needless to say, we did not understand credit scores at that time.
    Thank goodness all payments were made on time and the debt was eventually paid in full. I don’t see those actions on our credit report now, but probably would have been horrified if I had known what I was doing at the time.

    • Jim says:

      Actually you wouldn’t be horrified because while opening those new accounts did ding your score, paying on time improved it. Plus, you paid less in interest, meaning more money in your pocket, meaning you were less likely to miss payments and you were better off. It was a win all around I think.

  3. Greg says:

    Check your calendar Jim. April Fools is tomorrow not today. 🙂

  4. Scott says:

    This was a good one. Keep them coming!

  5. cubiclegeoff says:

    I thought I read somewhere recently that canceling cards does not impact the “length of credit history” very much, if at all anymore. I could be wrong though.

    • Jim says:

      I’ve heard the same thing though it will still impact your credit utilization, so it’s still a negative, regardless of the reason. The problem with credit scores is that it controls so much and it’s impossible to determine how the score is calculated. So it’s a bit like science in the Middle Ages, a lot of observation and guessing. 🙂

    • I had a credit card canceled because I did not use is regularly. The problem was that it happened around the same time I was trying to refinance my house. Unfortunately, that card was the one I had the longest history and it looks like it reduced my credit score by enough so that I couldn’t get the refinance at the time without going with a higher rate. Ended up not getting the refinance, but fortunately my rate is not too high.

    • Steven says:

      Not immediately, but 7 (or more?) years later when that card doesn’t appear on your credit report anymore. Kinda like how bankruptcy will eventually fall off the report.

  6. You could also just get a Chase credit card. They will gladly do the honor of reducing your credit limit in the middle of your travel while you’re actively using the card. 🙂

  7. So Jim, doing your part to help promote a no credit, cash based economy, eh? lol

  8. echidnina says:

    A lot of times knowing what NOT to do is more helpful than knowing what TO do! 🙂 So even though this article is in jest, it’s still a good source of info.

  9. zapeta says:

    The app-o-rama is a great…I wish I would have done one and earned interest on the CC companies money with no cost to me. Unfortunately those days are gone now.

  10. jsbrendog says:

    i plan on opening up as many credit cards as possible and then maxing them all out to buy awesome stuff and then never paying. ever.

  11. Great advice. I hope people understand this is not supposed to be advice you take, but things you avoid.

  12. Terry Pratt says:

    A long hospitalization and illness with loss of income trashed my credit almost ten years ago.

    Debt scavengers have bought most of my old debt and re-aged it. And I have two money judgments on these old debts.

    Since I’m living on a poverty-level income, I don’t see any way to improve my lousy credit. Clearly I can’t pay off the old debts, and they never seem to drop off my credit report, they just get sold and re-aged.

  13. eric says:

    Had a good laugh reading this although the picture was pretty nasty haha.

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