2/15/2011 1:35 PM ET|
How to get the worst credit score ever
Here are 5 ways to ensure you're doing serious damage to your finances -- plus more tips for ruining your life.
Your credit score can range from 300 to 850 -- the higher, the better. Most articles about credit scores focus on how you can improve your score to get approved for loans and get the best possible interest rates from lenders. But here, we're going to take the opposite approach and tell you how to achieve the worst credit score ever. If any of these behaviors apply to you, watch out -- you're in the process of doing some serious damage to your financial reputation.
1. Don't pay your bills
The most important part of your credit score is your repayment history, so if you want to have terrible credit, don't pay your bills.
Did you get a bill in the mail from your credit card company today? Don't open it. Leave it in the envelope and throw it on top of the growing pile of paper on your dining room table. By refusing to pay even the minimum monthly payment, you guarantee that the repayment history on your credit report will look terrible, showing that you have bills you haven't paid for 90-plus days. Eventually, your account will go to collections, making your score plummet further.
Better yet, throw your unopened credit card bill in the trash. That way, a thief might be able to acquire enough information about you to steal your identity, leaving you with a gigantic financial mess to clean up and completely trashing your credit score.
While you're at it, don't open your monthly mortgage statement either. Keep doing this month after month. Eventually, you'll lose your home to foreclosure. Between the unpaid mortgage and the credit card bills, you may even have to declare bankruptcy. Bankruptcies and foreclosures are a great way to ruin your credit not just in the short term, but for years to come.
2. Charge it!
The second most important factor of your credit score is how much you owe. So if you want to ruin your credit score, make sure to max out all of your credit cards. Better yet, try to spend past the limit! Then, don't pay the bill -- ever. Let the interest and late fees rack up. Instead of keeping your credit card balances below 15% to 25% of your total available credit, as credit experts like Liz Weston recommend, see if you can manage to owe $10,000 on a card with a $5,000 limit.
3. Apply, apply, apply
Keep in mind that 10% of your credit score is based on how many new accounts you have applied for recently. So if you want to mar this component of your score, why not surf the Web and see how many credit card applications you can fill out in a single day? Best of all, if you get approved, you'll have new tools for digging yourself into an even deeper financial hole.
4. Be a one-trick pony
Your credit score tends to be higher if you use a mix of different types of credit, such as credit cards, store accounts, an auto loan and a mortgage. Of course, to get approved for a mix of credit in the first place, you'd have to be responsible with your money. If you want to look bad, don't mix it up -- stick with credit cards. These are one of the easiest types of credit to get.
5. Assume that it's hopeless
Once you've thoroughly destroyed your credit, there's no sense in hoping that things could get better one day. After all, a bankruptcy can stay on your credit score for up to 10 years. So don't visit a nonprofit credit counseling service for help. Don't work out a budget to help you manage your money better. Don't cut up your credit cards or freeze them in blocks of ice. And don't take any baby steps toward paying off your debts. Just resign yourself to a life on the streets -- it will be harder for your creditors to track you down if you don't have a job, an address or a phone number. Don't believe anyone who tells you that you can turn your situation around in a year or two if you're motivated enough.
What won't affect your score
While you're hard at work destroying your credit and ensuring that your life will one day revolve completely around clawing your way out of debt, please keep in mind that there are a few destructive behaviors that won't have any impact on your credit score.
Unless you do it so often that your bank sends your account to collections, overdrawing your checking account won't have any effect on your credit score -- though it will be very expensive. Getting divorced, in and of itself, will not affect your credit score, so don't think that stepping out on your spouse will get you any closer to a 300. Losing your job won't directly affect your score, either, nor will receiving unemployment checks or signing up for food stamps.
Credit bureaus don't care if you're on public assistance, and they don't care if you have a job. They're only interested in whether and when you pay your bills, not how you derive the means to pay for them. But hey, why stop at just destroying your credit when you could destroy your entire life?
The bottom line
Please don't follow the tongue-in-cheek tips in this article -- we really don't want to see you ruin your finances, your relationships or your sanity. Instead, read "The 5 Biggest Factors That Affect Your Credit."
This article was reported by Amy Fontinelle for Investopedia.
VIDEO ON MSN MONEY
One more thing Amy, you make it sound as though the people who arent paying their credit card bill are choosing not to pay so they can spend the money on other things, sounds like you think that is the case, I think that the people who arent paying the credit cards are most likely keeping their electricity on and buying food for their families and not running around charging steak dinners and buying Elton John tickets. the banks got bailed out, but the american people didnt. So for you to sit there getting paid to talk down to people that are in a bad situation is pretty messed up.
This is complete B.S.,
I paid on time for YEARS ...and my score was STiLL going down. Apparently paying your bills like you should is not enough. You are apparently ALSO at the mercy of whether or not the companies you do business with know how to manage their own show.
Because the moment Those Companies get into trouble.. based on their own bad lending practices... and can just start lowering your limits.. each time, and as soon as they receive the next payment....it makes YOU .. the person who ALWAYS pays on time.. appear to have unusually high balances on your open-end debt.
The way credit is reported in this country is a colossal joke bordering on fraudulent.
This is just more of the same, "Bow Down at the Altar of the Credit Score," drivel that MSN seems to spout every month or so. Notice that there's no by-line? That's because they know it's crapola.
While getting in over our heads and having to struggle to pay off our credit debts has been a real challenge (actually, it really SUCKS), it has taught me one incredibly important thing: you can survive in this era without borrowing more money and with a lousy credit score! In fact, when my credit score tanked, guess what? We stopped receiving offers of more credit. No more junk mail! And as for the author's claim that if you throw your bills in the trash you might get your identity stolen, the biggest threat of that is that the thieves will take out more credit accounts and run up bills in your name. But guess what? Lousy credit score = no credit approvals. I'd like to see the look on an identity thief's face when he/she tries to get credit in my name!
My goal now is to have the lowest credit score possible: ZERO. Ironically, you get that by paying cash for everything rather than running up credit bills. The only reason to have a stellar credit score is to borrow more money. The credit card companies and the banks behind them are SNAKES, and I, for one, will never line the wallets of bank executives again with interest payments.
Get real, MSN! A new era is dawning in personal finances.
I was just wondering. Why not give everyone in Americal a 2nd chance? The credit bureaus have long been bastions of inaccurate data ruining many lives in the process. Also, many people (doctors and lawyers included) have undergone foreclosures, etc... Other people who may have had their credit ruined by medical expenses, identity theft, or other reasons
through no fault of their own (like inaccurate credit reporting), would still have good credit scores for debt they are responsible for on their own. So, why not give the consumer a fair shake like the failed banks or auto makers and others who get a free ride when they fail to run their business successfully?
How? My suggestion is to erase everyone's credit or get rid of the credit bureaus altogether. Sounds crazy right? Think about it. What would REALLY stimulate the economy? All "rebates" or "credits" to the American People come in the form of an "on paper" method of the government or other businesses. At least this way we all get a 2nd chance and the credit bureaus (if they are necessary any longer) should and will have to adhere to stiff penalties for inaccurate reporting of credit information. Credit bureaus are an invasion of privacy at best and have political agendas and are in bed with the banks, insurance companies, now our potential employers (gee wont that cause more unemployment?) and financial community. We sit here and struggle with what they deem our "Score" should be. It's crap.
So, bail out the American people. The trillions wasted could be given to each person (about 30,000.00 each or so), erase their credit scores (everyone will have perfect credit and at least 30,000.00 in the bank. A great incentive for banks to loan money again. Spending will happen and everyone will be happy. Sure, some will fall back into ruin, but, many more (given a 2nd chance) will maintain great credit and will succeed. You can contact me directly to start this from the grass roots up. Get rid of the credit bureaus!! If not at least make them accountable for being inaccurate and coming up with yet another **** way to edge credit scores down. again not the consumer's fault but we get the brunt end of the stick in our eyes as usual. Make credit bureaus accountable for inaccurate information or get rid of them. It's all **** and a waste of our time trying to cope with them. BTW I am debt free.
Writer must be a dumb or is it that he or she assumes we are dumb or stupid as a rock. its darn common sense now. Listen do you think people dont pay bills because they dont want ? or they want a bad credit score? people lose their jobs go bankrupt and UNABLE TO Pay bills not because they dont want. we do not want to ruin our credit scores. and we already know we should pay bills regardless its credit score or not. so stop putting up these garbage articles. even school kids know about this.
Since getting out of a serious debt several years back, my motto is "If you can't afford it in cash, you can't afford it on credit either" ....it works for me!!! :)
Our Founders revolted against England due to *far less* than this. Permanent disenfranchisement of large swathes of the middle and working classes is unacceptable. And our political system is *captured* - no solutions lie therein anymore.
They have forgotten the absolutely best way to drive your credit score through the basement.
Pay cash for everything, pay off your credit cards and then close the accounts.
Within 2 or 3 years of completing this plan your score will be zero.
Anybody ever think of NOT living with credit? As in, save and pay cash. I am amazed how much time, money, pressure is invested in keeping us Americans all believing that we need credit or a credit score. Make money, save money, live within your means, stop keeping up with the neighbors. If you want something, save for it. No company or score can prevent your or control your decisions. If you cant afford a house than don't buy a house. Not a thing wrong with renting. Can we imagine a world without credit? Credit commercials, credit score advice, credit score management. Stop! Make money, save money, keep a budget. Pretty simple.
People! DO NOT PAY YOUR BILLS! Of course you will have bad credit... so what? The good side of this is that you will have CASH! Think of all the money you will stop throwing away.. Yes! Throwing away to 30% or more on credit cards that have been cheating you and ripping you off for years! You might even finally get to actually save some money and build yourself a little security and freedom as a result. That is a heck of alot more important than that precious good credit trap.
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