It is said that it takes just 21 days to make or break a habit. Having specific habits, either good or bad, is only a part of being human. Some of us go late to bed or even surrender to our desire for unhealthy foods. Either way, you are harming your physical health. 

Likewise, many bad habits are harming your financial well-being – these might seem blameless in a glance but surely aren’t. Let’s look at some of the major harmful habits that can negatively affect your credit score and how you can change them. 

Making Only The Minimum Payments Of Your Credit Card 

While this act might seem harmless, unfortunately, it isn’t. Along with your consistency with payments, credit scores are also calculated by the amount you owe. If you stick to paying just the minimum amount, it will take years until you clear your debt.  

By paying just the minimum amount, a significant part of the payment is consumed by your card’s interest rate. According to experts, it is best advised to keep your credit utilisation ratio at 30% of your total credit limit or lower. If you pay off your complete balance every month, then your credit utilisation ratio is at 0%. 

The Best Thing To Do: Even if you can’t afford to pay off the entire balance, try to pay something more than minimum every month. 

Making Late Payments 

This one’s obvious. Making late payments will definitely affect your credit score. But, did you know that missing even one payment can cause a significant impact on your score? Sadly it does, and the higher your score is, the harder you fall. 

Even a single 30-day late payment can remain on your credit report for as long as seven years. As it is difficult to get a credit card with a bad credit score, ensure you never fail to make payments. If you can’t manage to gather funds by the pay date, try 12 month payday loans

The Best Thing To Do: Keep funds ready before the payment date and even set a reminder on the previous day, if your memory seems to be the villain.

Money moves to make in your 20s: #3 Create an emergency fund

Not Having An Emergency Savings Fund 

Simply put, your financial discipline can be judged by looking at how well you are prepared for emergencies. Even if it’s a small amount, saving each month can help. While savings doesn’t directly affect your credit score, it inevitably does. 

Suppose, you fail to have an emergency fund for some reason. Even before you know it, you will depend on credit cards or other forms of credits to meet your financial needs. Once you fall into this habit, you will soon be in a vicious cycle of debt – irreparably damaging your credit score. 

The Best Thing To Do: Have an emergency savings fund that you can rely on. 

Maxing Out Your Credit Card 

Maxing out your credit cards is a hurtful act as you are acquiring more debt. This would mess up your credit utilisation ratio and make it harder for you to pay it off.  

Credit utilisation is your credit limit vs the amount you use. For example, if your credit limit is set at £10,000 and you use £5,000, your credit utilisation is 50%. Not surprisingly, credit utilisation is taken into consideration while calculating your credit score. 

The Best Thing To Do: Always keep your credit utilisation under 30%. 

Defaulting A Loan 

Just like missing credit card payment dates, defaulting a loan can mess up your credit score. Even if it’s a personal or home loan, defaulting it can drop your credit score, even by 100 points.  

Interestingly, you can avail monthly payday loans if your credit score is low. So next time you are about to miss a loan payment, try securing a payday loan. Otherwise, it would take quite some time for your credit score to regain its former glory. 

The Best Thing To Do: Try keeping the funds ready before your payment dates. If you fail to acquire the needed funds, get in touch with your bank to see if there’s any other option. 

Not At All Making Payments 

The hole a late payment can cause is shallow to an extent – you can pay it off and recover your score with months of on-time payments. But not making payments at all can destroy your score to unimaginable levels.  

Even if you somehow manage to acquire the entire amount to pay off, your score will be still down for years. Such activities will stay on your report for as long as seven years. 

The Best Thing To Do: Set reminders to make your payments on time and control your spending habits. 

How to Easily Understand Where You Overspend - Due


A significant disadvantage of owning a credit card is your urge to overspend. When you get access to additional funds, your mind may surrender to your lavish desires. This can spoil your credit score if you fail to make payments. 

Overspending is a habit that, if neglected, can worsen your financial health like no other. As getting a credit card for bad credit score can be difficult, it is best advised to never fall into such a situation. 

The Best Thing To Do: Spend wisely, and before making any major purchase, take a week or two to rethink your choice. 

Using Credit Card To Pay Your Bills 

If you rely on credit cards for your day-to-day expenses, you are making a big mistake. Along with adversely affecting your future income by paying more interest, you are also harming your credit score by raising your credit utilisation. 

The Best Thing To Do: Pay your bills directly from the cash you have. Use credit cards only when there’s an emergency to purchase something. 

Opening New Credit Cards for Rewards 

As tempting as it is, signing up for new credit cards that offer rewards might seem like a loot. But, there’s a catch. In the long run, these discounts will cost you more than their value.  

Not only that but trying to open new credit cards will negatively impact your credit score. The higher the number of credit cards you apply for, the harder it will hit your score. 

The Best Thing To Do: Consider credit cards with rewards only if you are able to pay more than minimum payments. Also, never apply for multiple accounts. 

Not Having A Budget 

A well-planned budget is your saviour to maintain a stable financial condition and an impressive credit score. If you fail to have one, you lose. While having a budget won’t affect your score, its execution surely will.  

The Best Thing To Do: Make sure you assign fixed amounts of your income into different segments of budget. This will help you to beat the urge to overspend. 


Bad financial habits might be hard to correct, but definitely not impossible. The key is to put effort into it and be consistent. Next time you feel like overspending, step back and ask yourself – “Is this worth troubling my future self?” 

Try to replace your bad money habits with good financial habits. Your future self will thank you. 

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