You already know that you have to pay your credit card bills on time in order to keep a good credit history. And maybe you also know that having too much debt or maxing out your cards can drag your credit score down. But did you know that there are many other things that can hurt your credit score? It’s true, and some of them are downright surprising!
Check out our list of surprising situations that can sabotage your credit.
- Late payments: Okay, this one isn’t really surprising. What could come as a shock, however, is that just one late payment is enough to nick your score. Be careful with grace periods. Some lenders will still report you as late even if you’re within your grace period. It’s best to ask if you think you’re going to miss your due date.
- Early payoff: Believe it or not, some loans have fine print that says you can’t 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. If you think you’re paid up but your lender says you need to keep paying, you can get caught off guard. Check with your lender to know for sure.
- Overdue utility bills: Utility bills like water, electricity, cable, and your phone must be paid on time like a loan or a credit card. If you fall behind, the utility company may report you as delinquent to the credit agencies and your score will suffer.
- Cosigning a loan: If you cosign a loan or become an authorized user on someone else’s account, make sure they pay whatever is due on time. If they miss a payment, it will get noted on your credit history, sometimes without you even knowing it happened!
- Unpaid parking tickets: Did you forget to pay that parking ticket? Skip it because it wasn’t that much and you were only a minute late getting back in the first place? Your credit score can take a hit if you don’t pay your parking tickets. If you’re going to fight it, do so through the proper channels instead of ignoring it.
- Having only credit cards: You can have the best payment history around, but if you’ve never had another kind of loan, your score will suffer. Having both revolving (credit card) and installment (auto loan, for example) loans in your credit history can help boost your score.
- Gym memberships: If you don’t actually go to the gym, do you have to keep paying? You do if you’re under contract. Falling behind on gym fees can be just as damaging as missing other payments. Get all the details and cancel properly if you decide not to keep the membership.
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!
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