10 Surprising Things That Trash Your Credit Score

Submitted by Rachel on Thu, 05/17/2018 - 08:16
Trash your credit report
Don't trash your credit with carelessness
Image by Gary Chan via Unsplash

Credit scores are an integral part of our daily lives. They effect interest rates on a mortgage, auto loan, and even basics like utilities and insurance. For optimal financial opportunities, you need to keep an eye on your credit score. Take your eye off the prize, and your credit score could take a hit. Here are 10 things that could deflate a healthy credit score.

1 - Opening multiple credit card accounts

Aspects of your credit score include quantity and type of accounts plus how you use those accounts. Opening new accounts occasionally can boost your score but opening many in a short period can tank your score. It lowers your average account age plus all the hard inquiries can hurt.

2 – Delinquent taxes

Not paying taxes when due can lower your credit score. When the IRS or tax collector eventually comes knocking and sends you a bill for unpaid taxes, it is best to work out a compromise quickly. A collection item or liens can drag down your report and your score.

3 – Car rental reservations

Do you have plans to rent a car? If you use a debit card, some rental agencies might require a credit screening. If they run your credit with a hard inquiry, which is standard, it can lower your credit score and stay on your report for two years.

4 – Defaulting on rental payments

Failure to pay your rent on time may trigger your landlord or rental company to report your delinquency to credit bureaus. Some rental companies will report you right away for missing a payment while others may wait. Either way, it can drop your score.

5 – Unpaid doctor bills

Although the latest versions of credit scores put less weight on medical bills, they can still hurt your score. Now, medical bills generally won’t show up on your credit report for six months, but eventually, if they linger unpaid, will lower your score.

6 – Defaulting on any bills

Even though your cable and gas bills won’t show up on your credit report if you pay them on time, if you skip out, you can find they will certainly damage your score. Once a bill goes to debt collectors, they report a negative item and that's a credit score killer.

7 – Unpaid traffic tickets

Ignoring parking or speeding ticket is never a good idea, but did you know it can ding your credit if it lingers unpaid? You can also face a warrant for failing to pay or appear in court, and that’s a bigger issue, but neither is a good outcome!

8 – Overdue library books

You might not think twice about leaving a novel or DVD to gather dust at home, but you should take it back to the library on time and pay your late fees. If you don’t bring back the stuff, some libraries turn the cost over to a collections agency which can report to the credit bureaus.

9 – In-store financing

Some stores may offer you a sweet deal with zero-interest financing you may want to nab. But if it’s revolving credit and the limit is set to the amount of the purchase, you’ll have 100% utilization of your credit line which can drag down your score.

10 – Closing credit cards

Closing out older credit card accounts with less favorable terms might not seem like a big deal, but it can cause your score to plummet. First, closing an account lowers your overall credit lines and increase utilization. Second, it can diminish your average age of credit.

Your credit score is critical to many aspects of your life. Safeguarding it and constantly working to improve it are a best-practice. To find out more about improving your credit score, check out Credit Score Keys.