Everyone is concerned about low FICO scores. These are the scores that affect whether of not you can get credit. Here are 7 things that ruin your credit scores, which we urge you to avoid:
1. Public records. Bankruptcies, judgments, liens — all of these rank up there as some of the most damaging.
2. Severe late payment. This is the most common offense. Anything past 90 days constitutes "severe," but all late payments stay on your report for seven years, if reported.
3. Charge-off. This can happen if you're 30 days late, although credit card lenders often give you a few months. The debt is generally then sold to a collection agency. A charge-off will stay on your file for seven years from the date the account is terminally — 180 days — past due.
4. Collections. This is probably the second most common offense, after a severe late payment. It can be triggered by unpaid medical bills, utilities, credit card debt, you name it, and they're all equal in terms of the impact on your score. The notation will stay on for seven years, regardless of whether you pay it off, but you should still pay.
5. Settlement. You've seen the ads by companies to help you settle your debt for less than you owe. You can also try to do this yourself by calling and making an offer. Short sales, too, fall into this category. Settlement will stay on your file for seven years.
6. Repossession. Any asset that secures a loan can be repossessed. This, too, will stay on your file for seven years.
7. Foreclosure. Foreclosure stays on your report for seven years. If you want to lessen the blow (slightly), try a deed in lieu of foreclosure — with that, you're waving the white flag, telling the lender you can't pay, and turning in the keys.
Finally, let's clear up a few myths about what doesn't hurt your score. Your income is not a factor. Having many credit cards, as long as you manage them wisely, won't hurt you — and in fact, it might help you. And the fact that you ran up your credit card bill a couple months ago, but paid it off in full, won't affect your score when you check it now.