Late Or Missing Payments
Your payment history is one of the most important factors regarding your credit score and will impact your ability to apply for loans and mortgages. If you have any late payments or payments that have not been paid altogether, this will reflect negatively on your credit score to the bank. This can be deemed as unreliable and financially irresponsible.
Applying For A Lot Of Credit
When you apply for money, a lender will ask to see your credit reports. When this happens, this is recorded against your credit file so that the bank can see that you have applied for some sort of loan. Usually, these records will stay against your name for two years. Therefore, if you have applied to multiple sources of credit in a short period of time, lenders will be able to see this, and it can signal that you are in a worrying financial situation.
Being Dependent on Credit
Banks see it as a red flag if it shows you are constantly using credit cards to fund everything. You should ideally never use over 30%, and less than this is even better. If you can show your bank that you only use your credit card for certain payments, and can pay it back on time, this is a great indicator that you are financially responsible and reliable to gain a loan.
Closing A Credit Card Account
Closing a credit card can also hurt your credit score. It will also shorten your credit history which can be timely to build back up again, especially if you are planning to buy a house, car, apply for a mortgage or loan etc.