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Forget ghosts, goblins, and ghouls. Mismanaging and damaging your credit can be scarier than an old, dilapidated mansion haunted by all three. But don’t cower in fear and shy away from using credit or shun it altogether. The good news is there are credit “tricks” and even a few “treats” that make establishing good credit and managing it effectively something to actually look forward to, not fear.
Trick or Treat Halloween Jack'o'Lantern

Forget ghosts, goblins, and ghouls. Mismanaging and damaging your credit can be scarier than an old, dilapidated mansion haunted by all three. But don’t cower in fear and shy away from using credit or shun it altogether. The good news is there are credit “tricks” and even a few “treats” that make establishing good credit and managing it effectively something to actually look forward to, not fear.

But first, in honor of the time of year when most everyone appreciates a good scare, here are a few “creepy” credit facts that, if ignored, could turn your credit report into a horror story and send your credit score six feet under.


1. A Single Late Payment Could Plummet Your Credit Score Over 100 Points

This may sound like a spooky urban legend, but it’s backed up by data from FICO®, one of the major companies that calculates credit scores. Equifax, one of the three major credit reporting agencies, reported data from FICO that a 30-day delinquency could lower a credit score of 780 by 90 to 110 points.

2. A Late Payment Can Haunt You for 7 Years

Late payments stay on your credit report for up to seven years—the same number of bad-luck years from breaking a mirror. Even scarier, a single 90-day late payment can be as damaging to your credit score as a bankruptcy.

3. Not Using Credit Can Harm Your Credit

Your credit score is a reflection of your creditworthiness, so if you have minimal or no credit activity, that reflection could resemble a vampire’s. It won’t be the nothing Dracula sees when he looks in the mirror, but it will likely fall within the lower end of the range, which may send chills down the spines of potential lenders.

4. Killing a Credit Card Could Hurt Your Credit Score

Closing a credit card account because you don’t use it much or want to reduce the number of cards you have may seem like a responsible credit move, but it could actually drive a stake through the heart of your credit utilization ratio (CUR), a major component of your credit score.

Credit Utilization Ratio = Sum of Your Outstanding Revolving Credit Balances ÷ Sum of Your Revolving Credit Limits

If you close a credit card, that card’s limit is no longer factored into calculating the CUR, which can raise it and, in turn, lower your credit score.

5. Bad Credit May Scare Away Employers—and Even Dates

A less-than-stellar credit report could make you look like a nightmare hire to your dream employer. That’s because many employers check job applicants’ credit reports as part of a background check, the theory being the way you handle credit could be indicative of how you’ll handle the job.

Bad credit can also make you look like Mr. or Mrs. Wrong to potential partners. A recent survey of online daters revealed that 58% of the respondents found a good credit score more attractive than a nice car; 40% found it more attractive than a physically fit body.

6. Credit Report Errors May Be Telling a Chilling Tale About You

study by the Federal Trade Commission found that one in five Americans had a mistake in their credit reports. Even spookier, 5% of Americans had errors serious enough to result in them being overcharged for credit because their reports portrayed them as higher-risk borrowers than they actually were.

7. Bad Credit Could Cost You Thousands of Dollars Over Your Lifetime

The interest you’ll pay on borrowed money with bad credit could be monstrous compared to what you’d pay with good credit. A recent survey by the Consumer Federation of America and VantageScore Solutions found that, on a typical auto loan, a borrower with bad credit pays over $5,000 more than a borrower with good credit.

You’ll also probably pay more for homeowners and car insurance because many insurers factor your credit score into calculating your premiums. This helpful calculator gives you an estimate of how much you can expect debt to cost you over your lifetime, based on your credit score, age, and location.


Fear not! Following these simple suggestions could help you establish and maintain better credit.

1. Be Proactive to Ensure Payments Are On Time

The best way to avoid being haunted by a late payment is to keep from making one in the first place. Consider setting up automatic reminders to make sure your payments are received on time.

If your payment due date makes you shudder—say, it’s too close to or far away from payday—many credit card companies, including Credit One Bank, will let you change it to a date that may be more convenient for you. If you do miss a payment, try to make it up as soon as possible to keep its past-due status from escalating.

2. Reduce Outstanding Balances

The larger the sum of your outstanding balances, the larger your CUR, which can make your credit score suffer. Paying more than the minimum amount due should help reduce your CUR and save you money on interest.

3. Take Advantage of Credit Line Increases

Don’t be afraid of increasing credit limits. So long as you don’t increase your outstanding balances as well, a credit line increase will lower your CUR, which may give your credit score a jolt.

4. Check Credit Reports Regularly

The best way to ensure lenders are getting an accurate picture of your credit behavior and avoid the frightening prospect of being overcharged for credit is to periodically check your credit reports and dispute any errors with the credit reporting agencies.

5. Become an Authorized User

If you’re having a ghastly time getting credit, consider asking someone you know with good credit to add you as an authorized user to their account. Many credit card companies report account activity to credit reporting agencies for both the primary account holder and authorized user, which can help the authorized user build a credit history.


The main treat credit offers is providing you with purchasing power now, which you agree to pay back later. But there are a few others that make a free bag of Halloween candy look like child’s play:

1. Cash Back Rewards & Other Perks

Many credit cards come with incentives like free airline miles or cash back rewards on eligible purchases. So not only are you getting money up front to make purchases, you’re also earning additional purchasing power and/or other freebies for using a credit card. Some credit cards offer additional perks, such as travel or rental car insurance for trips booked using their card.

2. Free Credit Scores

A free credit score is a standard offering from many credit card companies, including Credit One Bank. Other companies, such as Credit Karma, allow you to check your score online for free as well. Knowing your score, and what might be affecting it, can prove useful in effectively managing your credit.

3. Free Credit Reports

By federal law, you are entitled to one free credit report from each of the three credit reporting agencies—Experian, TransUnion, and Equifax—every 12 months. They’re available at AnnualCreditReport.com, and you can get them all at once or stagger when you get which one. Getting them is fast and free, so there’s really no excuse not to know what’s on your credit report.

About the author:

Sean P. Egen

After realizing he couldn’t pay back his outrageous film school student loans with rejection notices from Hollywood studios, Sean focused his screenwriting skills on scripting corporate videos. Videos led to marketing communications, which led to articles and, before he knew it, Sean was making a living as a writer. He continues to do so today by leveraging his expertise in credit, financial planning, wealth-building, and living your best life for Credit One Bank.

This material is for informational purposes only and is not intended to replace the advice of a qualified tax advisor, attorney or financial advisor. Readers should consult with their own tax advisor, attorney or financial advisor with regard to their personal situations.