Have you ever checked your credit score one month, only to find the next month that it lowered a ridiculous amount? There are some small things you might be doing that are affecting your score. Check them out:
Car rental reservations
If you’re planning on renting a car, you may not want to use a debit card to do so. If you use a debit card, the rental car company might require a credit screening. That inquiry can ding your credit score.
Here’s a better option: Confirm the reservation with your credit card to avoid the unnecessary credit inquiry. Then, settle the final bill with your debit card upon returning the vehicle.
Not paying your rent payment
If you fail to pay rent on time, your landlord might report your delinquency to the credit bureaus. Hopefully you have open communication with your landlord and are able to explain any hardship you may be having that month. Propose an alternative payment plan until you’re caught up. Don’t risk your credit.
Outstanding medical bills
If you’re having trouble paying your medical bills, negotiate or request a payment plan. Ignoring collectors can result in a hit to your credit in the form of a collection account.
Due to credit industry changes announced in 2016, medical debts are reported only after a 180-day waiting period designed to allow enough time for insurance payments to be applied. And it’s possible to get a credit reporting company to remove medication collections from your credit report once the debt is paid or is being paid by the insurer.
Delinquent tax payments
Your can run from the IRS, but you can’t hide. You’ll be tracked down eventually, and your credit score will crash.
Closing credit cards
Closing a credit card account may seem like a good idea, but it can hurt your credit score. Closing an account can impact your credit utilization ratio: the amount of available credit you have. Closing a credit card account that you’re not using would decrease your available credit, however. That would in turn increase your credit utilization score, hurting your credit score.
Unsettled gym membership
It may seem frustrating that you’re shoveling out money for a membership that you’re not using, but don’t just walk away.
Properly close the account because if you don’t, gym owners aren’t afraid to send you to collections for the money you owe them. This will put a serious ding in your credit score.
Not paying recurring bills
You’ll receive notices if you are past due on a bill or any sort, but if you don’t respond to those noticed, the provider might get fed up and turn you over to debt collectors. As you can tell by now – not a good thing. Don’t ignore or fail to settle outstanding bills.
Opening too many credit card accounts
Did you know that ten percent of your FICO credit score is determined by how you shop for credit? According to Fair Isaac Corp., “If you have been managing credit for a short time, don’t open a lot of new accounts too rapidly. New accounts will lower your average account age, which will have a larger effect on your FICO scores if you don’t have a lot of other credit information. Even if you have used credit for a long time, opening a new account can still lower your FICO scores.”