Like it or not, your credit score is crucial to your financial well-being. And certain habits can harm your credit and limit your financial opportunities.

Avoiding the bad credit habits below can help you maintain a healthy credit profile.

Common bad credit habits that can hurt your score

1. Late or missed payments

One of the most damaging habits for your credit score is failing to pay bills on time. Your payment history accounts for 35% of your FICO score, making it the single most influential factor. Even one payment that’s 30 days late can lower your score by 100 points or more — and that can stay on your credit report for up to seven years.

To avoid this costly mistake, set up automatic payments or reminders. Staying current with your payments is the most effective way to build a strong credit history.

2. High credit utilization

Having credit card balances that are too high relative to your available credit can negatively affect your credit score. Ideally, your credit utilization ratio should stay below 30% of your available credit, but lower is always better (below 15% is considered excellent). Consistently using more than 75% of your available credit signals financial strain to lenders and can lower your score.

To keep utilization low, focus on:

• Paying off balances in full each month
• Making multiple payments throughout the billing cycle
• Requesting a credit limit increase to reduce your utilization ratio

3. Only making minimum payments

While making the minimum payment keeps an account in good standing, it can lead to high balances over time and increased interest charges. Carrying large balances can take years to pay off and will factor into your credit utilization. Pay more than the minimum required whenever possible to reduce your debt faster.

4. Closing old credit accounts prematurely

While closing unused credit card accounts may seem like the right decision, it can harm your credit. Closing an old account reduces your total available credit, increasing your credit utilization ratio. It also shortens the average age of your credit history, a factor that accounts for 15% of your FICO score. Consider keeping an older credit card account open and using it for the occasional small purchase to maintain an active credit history.

5. Applying for too much credit too often

Every time you apply for a credit card or loan, a hard inquiry shows up on your credit report. Too many inquiries in a short period can temporarily lower your score and signal to lenders that you may be financially overextended. Additionally, opening multiple new accounts also reduces the average age of your credit history, which dings your score.

6. Taking out cash advances

Credit card cash advances are a convenient solution in crunch times, but they have high fees and interest rates that start accruing immediately. Cash advances quickly increase debt and can harm your overall credit utilization. Exploring personal loans or other options before resorting to cash advances is for the best.

7. Co-signing loans without caution

Co-signing a loan for someone else is a kind gesture but carries significant financial risk. When you co-sign, you become equally responsible for the debt. If the primary borrower misses payments — or defaults — it will negatively impact your credit score, and you may be responsible for the financial burden. Only co-sign a loan if you fully trust the borrower to pay it off on time.

8. Ignoring your credit report

Incorrect account balances or accounts you didn’t open can lower your score. Make it a habit to check your credit report periodically through AnnualCreditReport.com, which allows you to obtain free reports once a year from the three largest credit bureaus (Equifax, Experian, and TransUnion).

It’s never too late to have good credit

Breaking bad credit habits and adopting responsible financial behaviors is key to improving your credit score. Set yourself up for financial success by paying bills on time, keeping credit utilization low, and monitoring your credit regularly.

If you’re currently challenged and need auto financing, Credit Acceptance might be able to help. We work with more than 12,000 auto dealerships coast-to-coast and even make it possible for you to get pre-qualified online.