10 Bad Habits that are Ruining Your Credit

No one is perfect, no matter how hard we try. However, you may not realize what certain actions and habits you do consistently are impacting your credit in a negative way. If getting your finances in order is a goal for you, don’t forget to focus on your credit. Your credit and credit history is what potential lenders refer to when determining how worthy you are of credit.

You want the lowest interest rates, the highest buying power and the option to choose. To get all of those things, you need a good credit score. How can you have a good credit score if you don’t realize which bad habits are ruining it? The CGS Team is sharing 10 bad habits you may be doing that could be hurting your credit score. When you know better, you can do better.

10 Bad Habits Ruining Your Credit…and More!


It’s bad enough that smoking hurts your health, but it can also hurt your credit! The average cost of a pack of cigarettes is $5.50. That comes out to a yearly expense of just under $3,000. Other smoking vices like vapor or cigars can get pricier than cigarettes.  It may be a bad habit to break, but imagine how much quicker you could pay off your debts with an extra $3000 a year?


Drinking may not be as bad for your health as smoking, but it is certainly just as bad (if not more) financially. If you live in a big city like New York or Los Angeles, you could be shelling out as much as $18 for a single drink on a night out. Depending on how often you go out, that could add up quickly.

Instead, opt for happy hours with major steals, or stick to the clearance aisle when shopping for wine. If drinking is not something you plan on giving up, at least cut back and budget for it. The more money you spend on drinking, the less you have to pay down your debts.

Eating Out

This is a biggie, especially if you’re not careful! We’re all busy. Whether it’s driving to meet a client, picking up your child from school, or running around in between errands, it’s so easy to pick up something to eat while out and about.

Nearly 75% of CGS clients spend most of their money on eating out. Start getting into the habit of visiting the grocery store regularly, cooking at home and taking food and snacks with you on the go. All of that extra money going to eating out can be used to make extra payments on your debts and give your credit score a boost.

Only Paying the Minimum

If you are not eating out, smoking, and truly staying within your budget, but can only afford the minimum payment, that’s one thing. If you can only afford the minimum payment because you splurged all month, you are not off the hook. 

Only paying the minimum on your debts leads to more interest, longer life of the debt, and an extra stress on your shoulders.  It also doesn’t do any good for your credit score. Sure, the fact that you pay at least the minimum on time is important, but your credit utilization ratio is not really changing with just minimum payments.

Charging Everything You Buy

It’s so easy to pull out a card and swipe a purchase. And while the purchases may seem minimal at the time, they add up over the course of the month. If your statement comes back larger than you expected (and budgeted for) it’s time to retire the plastic. It’s never good for your score to have balances carry over that you truly can’t afford. A budget is a FANTASTIC way to know what you can afford. CGS Founder Raya creates custom budget plans for clients. Get yours now!

Splurging on Your Friends

Your friend just broke up with her boyfriend, just got another raise at work, or moved into her third apartment in a year. If it’s not a birthday, holiday or truly special occasion, splurging on your friends is hurting your wallet and ultimately your credit score. Even if you make more money than your friends, it doesn’t give them free reign to allow you to splurge and treat all the time.  Next time the situation comes up, come with just enough cash to cover yourself.

Ignoring Available Coffee Makers

We all need a coffee, tea, or other drink fix. But, do we need it every day from a café or Starbucks? Probably not. You probably have a coffee maker at home, and if not, most offices carry a Keurig – stop ignoring them! Daily splurges on coffee and drinks add up very quickly. Most times a treat is thrown into the mix as well. Start cutting back by making your own tea and coffee for the day. You will appreciate a professionally-made coffee more, and will savor it when you do get one!

Not Following Your Budget

Your budget is there to guide your spending. If you aren’t following your budget because you are spending more on things you should, requirements like savings and larger credit card payments are the ones effected. Make it a point to consistently review your budget and track your spending. Give yourself cash for the fun spending and remember the bigger picture.  A dream home with a low interest rate is achievable, when your credit score is good!

Impulse Shopping

Impulse shopping kills a budget and ultimately hurts your credit score.  If you know you have a problem, take yourself out of situations that could cause you to spend. Avoid the malls and perusing your favorite online retailers.

Delete any newsletter that may spark you to make a purchase. When you control your impulse purchases, you can stay on par with your budget and pay those debts off! Check out CGS Podcast Episode #6: How I Curbed My Desire to Spend for the things I did to beat impulses!

Keeping Up With the Joneses

We all want a nice apartment, nice car, or to travel the world, but can you really afford it right now? If your rent is over 30% of your income, it may be time to downsize. If you need to charge your next vacation on a credit card to afford it, you may need to hold off on the traveling. Be real with yourself and live within (preferably under) your means.  Don’t worry about what other people are doing, as you don’t know how they got to where they are. Focus on your spending and doing the right thing and everything will work itself out.

Related: 10 Bad Spending Habits that Can Hurt You Down the Line


Some things are just not worth it. To reach your financial goals, certain sacrifices need to be made – and there’s nothing wrong with that. Be mindful of your spending, and follow your budget! Your debts will make their way down and your credit will works its way up. Are you guilty of any of the habits above? What have you done to improve your credit score? Post a comment below to share your thoughts!

-The CGS Team



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