Which of the following habits is most likely to lower your credit score?

• A. Making late payments on your credit cards
• B. Keeping your credit card balances low
• C. Paying your bills in full each month
• D. Reviewing your credit report regularly

Answer: (A)

Verified step by step guidance

1. Understand the concept of a credit score: A credit score is a numerical representation of your creditworthiness, based on your credit history. It is influenced by factors such as payment history, credit utilization, length of credit history, types of credit, and recent credit inquiries.
2. Identify the key factor in the question: The question asks which habit is most likely to lower your credit score. Payment history is one of the most significant factors affecting your credit score, and making late payments negatively impacts this factor.
3. Analyze each option: Evaluate how each habit affects your credit score. For example, keeping credit card balances low and paying bills in full each month are positive habits that improve your credit score, while making late payments is a negative habit that lowers it.
4. Consider the importance of reviewing your credit report: Regularly reviewing your credit report helps you identify errors or fraudulent activity, which can indirectly protect your credit score. However, this habit does not directly lower your score.
5. Conclude that making late payments on your credit cards is the habit most likely to lower your credit score, as it directly impacts your payment history, which is a major component of your credit score calculation.