A combination of factors go into your credit score. Some of them seem obvious, like how well you’ve repaid loans in the past. What you may not realize, however, is that many things that seem like no big deal can actually be reported to the credit bureaus and bring your score down. Here are some often overlooked items:
- Unpaid parking tickets: No one likes getting them, but ignoring them can lead to a lower credit score.
- Overdue utility bills: From your electricity to internet bills, household utilities must be paid timely.
- Gym memberships: Many people sign up for a gym then stop going. That’s an easy way to forget to pay for it, too! If you signed a contract, make sure you pay the fees.
- Having only credit cards: You can have the best payment history around, but if you’ve never had another kind of loan, your score can get dinged. Having both revolving (credit card) and installment (auto loan, for example) loans in your credit history can help boost your score.
- Late payments: Okay, so maybe you knew this one already. But did you know that just one late payment is enough to nick your score? Also, it’s important to know if there is any grace period on loans - meaning, if the bill is due on the first but you pay on the second one month, will you be penalized? Ask your lender!
- Cosigning a loan: This can be a good thing for you - but only if the other person makes their payments. If the borrower you cosigned for falls behind and doesn’t tell you, your score will take the hit.
- Paying off your debts early: This one may seem way off base, but it’s important to check with your lenders to find out if there are any stipulations in your loan agreement that say you cannot pay your loan off early. Some contracts state you must pay for a certain amount of time without an option to pay off the loan more quickly.
Minding your credit can seem complicated, but it doesn’t have to be. Read the fine print on all loan contracts, pay your bills on time, and don’t lose track of any obligations. If you do find yourself in a sticky situation, talk to your lender as soon as you can - before it ends up on your credit report!
If you need auto financing but your credit is keeping you from getting approved, CreditYes can help! We can match you with a dealership in your area that will be with you every step of the way. Our service is fast and free. Fill out our secure online application and get behind the wheel of your next car today!