Read at your own risk - these steps are guaranteed to ruin your credit rating and destroy your financial future faster than setting your wallet on fire!
- Never pay your bills on time! And definitely don't use online bill pay! It's way too easy, and not paying your bills on time, every time, is sure to send your credit score plummeting. Being late with your bills can damage your credit rating pretty quickly, as well as increasing the interest you pay on all of your accounts.
- In fact, don't pay your bills at all! Forget the fact that your payment history makes up more than one-third of your credit score. Just cross your fingers and hope that the bills go away all by themselves. That is, unless the creditors send the collection agencies after you...
- Ignore any collection agency requests that you get. If you're setting out to ruin your credit rating, this is a key step! Everything from an overdue library fine to a parking ticket to a late credit card payment can be submitted to a collection agency, so even little fines can affect your credit score!
- Always use revolving credit, preferably with high interest rates! If you want to ruin your credit, don't go for "responsible" home equity loans or anything like that. Use your credit cards! It's easier, the companies will usually up your limit so that you can spend more, and all you have to do is pay an outrageous interest rate and, of course, send your credit score down.
- Never, ever review your credit report. Sure, it's free - each of the three credit reporting agencies in the US (Experian, EquiFax, and TransUnion) are required to provide one free credit report upon request per year. And it's easy - you can do it from your computer at work or from home. However, if you're trying to ruin your credit, the last thing you want to do is check your credit report for possible problems!
- Hold as many low limit credit cards as possible. Low limit credit cards show creditors that you can't get a higher limit - a red flag for any creditor. Anyone who was not looking to ruin their credit would set out to build their credit limit using just one or two cards with higher limits. Also, the low limit cards are easier to max out, leading to the next way to ruin your credit...
- Make sure you max out your credit cards - all of them! Pushing your spending to the limit of your credit cards is a great way to successfully ruin your credit. The higher your debt is, compared to your credit limit, the more proof that you can't control your spending and that you're a high risk for creditors.
- Close all of your long-term credit accounts. The length of time that you hold credit accounts in good standing can positively affect your credit score, since they show that you are actually responsible. If you're trying to ruin your credit, definitely close your long-term accounts and keep opening new ones! Speaking of that...
- Apply for multiple credit cards at once. That's it - apply for as many as possible! Creditors consider this "abnormal behavior" and a surefire sign that you are a credit risk.
- Pay only the minimum credit card payment. Better yet, pay only half of the minimum payment! Paying the minimum amount possible shows creditors that you are overextended, and can reduce your credit score. As an added bonus, paying as little as possible on your credit card debt ensures that the credit card companies make as much money as possible off you, as you continue to pay interest on that fast-food meal for the next twenty years.
- Co-sign for as many irresponsible people as possible. When you co-sign for somebody, you are agreeing to be responsible for the payments if he or she is not able to make them. This means that someone else's irresponsible actions could cause your credit rating to go way down; the creditor can even sue you! What a great way to ruin your credit and lose your assets - all for someone else!
- Finally, to be sure to ruin your credit, lend out your credit cards to as many people as possible! Friends, relatives, neighbors - hand them out freely. People will probably pay you back someday...
If this doesn't sound like the path you want to go down - and I hope it doesn't! - then it's pretty easy to figure out what to do. Think about your credit rating and your financial future. Just checking your credit report can alert you to any problems or inaccuracies with your credit, but a surprising number of Americans still don't take advantage of it. Make sure you check your credit rating, use credit cards responsibly, prevent identity theft, and learn to shop safely online. A little common sense can go a long way towards not ruining your credit rating.