How to completly destroy your Credit Score: Part 2- Holiday Headache Lasting through 2008

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Were the first 3 credit destroying tips not enough?  Maybe the holiday shopping went way past the ninth inning.  If you still feel the need to chip away and make your credit score look more like your golf handicap here are the final four credit meltdowns.

“Isn’t it a wonderful time for Christmas…” “Ohhh, you better not….”

4. Shop till the score drops. Now, I know people like choice and like to compare and shop. That’s a good thing for most things. However, you don’t want to shop credit cards or mortgage companies till the wee hours of the night. It’s okay to look at three mortgage programs, or compare two credit cards. Remember every time you have your score checked it drops by a few points, and that is okay for most people. However, when you have 30 credit inquiries in 90 days that looks very bad and your score will hit bottom really quick.

5. Accept all credit offers and open accounts with all of them on the same day. This is where you open five credit card accounts on the same day. That means the amount of money available to you increases dramatically and all of a sudden you’re a bull that just got let loose in San Francisco’s China Town. It is very dangerous to your credit score.

6. More revolving credit than installment loans. If you have sixteen credit cards but only one car payment you’re a greater risk. This is because installment loans (such as a car loan) are amortized payments and you’ll eventually pay it off. However, credit card payments can take years to pay off and can really be a drain on your resources. That is why the proportion is important. Two car loans and three credit cards is all you really need on your report.

7. The 20% off all purchases credit cards. These are the store credit cards you are offered in exchange for 20% off all purchases at the local department store. While the discount is enticing and yours truly has twice been suckered in, the hit on your credit score can be pretty brutal. The reason being is that these cards typically have very low credit limits to start with and if you’re doing Christmas shopping you can max it out pretty quick. You don’t even have to max it out, you can reach the 50% level with one swipe at the mall.

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