Payment History

• Because your payment history makes up 35 percent of your credit score, actions in this category have the most potential to negatively affect your credit score. The worst one is declaring bankruptcy, which can suddenly drop your score by more than 200 points. Settling debts for less than you owe, as occurs in foreclosure or settling a credit card debt, also damages your credit score. Lastly, each late payment and collections account on your credit report negatively affects your credit score.
  
  

Amount of Debt

• About 30 percent of your credit score is based on the amount you owe on each of the accounts on your credit report. If you borrow more money, the amount you owe will increase and your credit score will decrease. One special area to pay attention to is your revolving credit utilization. Your credit score drops as you use a higher percentage of each credit line. Maxing out one credit card can drop your score by up to 45 points, according to Fair Isaac Corp.
  
  

Length of History

• Having a short credit history negatively affects your credit score. This is because 15 percent of your score considers how long you have been managing credit. If you have a longer credit history, you have likely developed more skills with managing money and paying bills than someone with a short credit history. Therefore, if you have just begun using credit, this affects your score negatively. In addition, if an old credit account drops off your credit report, this also might hurt your score a little bit.
  
  

Types of Credit

• About 10 percent of your credit score considers the variety of types of credit you manage. The two major types are installment loans, which involve borrowing money all at once and paying it back with equal monthly payments, and credit lines, which allow you to continually borrow and pay back varying sums of money. If you lack one of these two major types of credit on your report, this will negatively affect your score. In addition, if you have too many accounts of a specific type, such as store credit cards, this could also hurt your score.
  
  

Recent Credit

• Applying for and opening credit accounts hurts your credit score for a short time. About 10 percent of your score considers your new accounts, in particular, how many you have compared to old accounts and how recently the new accounts were opened. Therefore, each time you open a new account, it will hurt your credit score a little bit. In addition, each time you submit a credit application that triggers a credit check, that will hurt your score as well. This is because people who apply for lots of credit tend to be in financial trouble and are more likely to default on payments.