What hurts your credit score: 7 Top Score Killers

what hurts your credit scoreIt is not a big mystery that some financial activity will drop your credit score more than other activity; but you may be surprised at what hurts your credit score most.

There is virtually no way to get around credit scores if you want to qualify for credit cards, a mortgage or car loan, rent an apartment, or even get a cell phone.  Your credit score is weaved throughout your everyday life and can sometimes determine your quality of life.

The top secret activity compiled by Fair Isaac Corporation, the people who developed FICO scores, keeps consumers from knowing exactly what complex data, algorithms, and number crunching is involved in the scoring model.

However, Liz Pulliam Weston wrote an article for MSN Money where she asked FICO to compute how many points a consumer’s score would drop based upon certain actions. The results, although not set in concrete, are informative and somewhat disturbing.

1. Bankruptcy
Filing a bankruptcy is a last resort for most consumers and is not an easy decision. The effects of bankruptcy are not forever but it does remain on a credit report for up to 10 years for a Chapter 7 filing and up to 7 years for a Chapter 13 filing.

  • Effect on a 680 score – drop in score by 130-150 points
  • Effect on a 780 score – drop in score by 220-240 points

2. Foreclosure
Unfortunately for the past few years, foreclosures have risen in spite of the efforts made by the Obama Administration’s Making Home Affordable Plan. The numbers may continue to rise until the housing market bottoms out and corrects itself.

  • Effect on a 680 score – drop in score by 85-105 points
  • Effect on a 780 score – drop in score by 140-160 points

3. Settle debt for less than amount owed
Debt settlement with an original creditor is gaining in popularity but the problem is the missed payments prior to agreeing to settle the debt. Those missed payments knock out your credit score, especially if the score was a high. Alternatively, debt settlement with a collection agency may actually increase your score if you are able to negotiate a total deletion from your credit reports in exchange for payment in full.

  • Effect on a 680 score – drop in score by 45-65 points
  • Effect on a 780 score – drop in score by 105-125 points

4. (30) Day Late or Missed Payments
If a credit score is already low there will be a lesser drop because past credit behavior is already factored into the score.

  • Effect on a 680 score – drop in score by 60-80 points
  • Effect on a 780 score – drop in score by 90-110 points

5. Maxing out credit cards
The higher your credit score, the more detrimental a negative action can have on the score. Typically, consumers with less than perfect credit already have particular patterns of credit usage factored into their scores.

On the other hand, what happens to consumers with very good credit is quite the opposite. The scoring model views a negative occurrence as a sign the consumer is heading for financial trouble because negative entries on your report are atypical.

  • Effect on a 680 score – drop in score by 10-30 points
  • Effect on a 780 score – drop in score by 25-45 points

6. Loan Modification
Mortgage loan modification is a popular remedy for homeowners facing default and foreclosure. Some consumers have experienced a drop in credit scores by as much as 100 points. Some lenders will continue to report rolling 30 day late payments to the credit bureau, especially if the loan modification has a trial period.

7. Balance Transfer
Transferring your credit balances to one card may sound reasonable, especially if that card has a low introductory interest rate. This practice can seriously hurt your credit score as carrying a high balance changes your credit utilization ratio.

Fico scoring model calculates the amount owed on an account in comparison to the credit limit. Consumers with a high limit and a high balance to match can expect a ding in their scores. Keep balances to 30% or less or the available credit limit.

There is good news in light of the above activities that will hurt your credit score. Credit history and credit scores are fluid. A slip up like a late payment can remain on your credit report for seven years but making consecutive on-time payments for several months will raise your score by more than 75 points according to a study by Vantagescore.

Get in the habit to Monitor your FICO Score on a routine, consistent basis and keep track of your FICO Score and credit history.

(More: Overview of FICO’s Newest Version)


  1. Hi I originally obtained a auto loan for 18000.00 and unfortunately was forced into a chapter 13 bankruptcy that was eventually dismissed. I returned to paying the vehicle due to a need to have transportation at the time. While the vehicle indicates paid on my credit report, it is reported in the negative column due to the bankruptcy. Do I have any options to move a paid loan not on the original terms into a better status. Any assistance would be greatly appreciated.

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