10 Surprising things that could hurt your credit score

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Most of us understand the basics about credit reporting and what might hurt our score – missing a mortgage payment, maxing out a credit card, or shopping around for too many loans at the same time. But there are plenty of little known credit pitfalls, too, including these ten:

1. Overdue library books
Remember that book you checked out from the local library 3 ½ years ago that you never returned because it fell in between the seats of your car? It could hurt your credit score, as more libraries are now using collection agencies to collect larger fines on overdue books and serial abusers.

2. Unpaid medical bills
By not paying your medical bills, you’re putting your credit in serious jeopardy. After only a few months of non-payment, the billing department at your doctor’s office or hospital will probably turn your account over to collection. Did you know that medical bills are the number one reason for bankruptcy in the United States, causing more than 60% of all BK’s?!

3. Renting a car with a debit card
The easiest way to rent a car is with a credit card, but if you don’t have one or you don’t use it for some reason, it could negatively affect your credit. The other alternative is using a debit card, and with that, the rental car company will probably ask for a security deposit and run a hard credit check. A hard credit check could drop your score a few points and will remain on your credit report for two years. The fact that they reserve the right to run a credit check is often buried in the fine print, so ask plenty of questions ahead of time…or use a credit card, which has a preapproved spending limit so no credit check will be required.

4. Unpaid parking tickets
The parking ticket you got that time you decided to leave your car in the Police Chief’s official spot might only have been for $50, but it could cause big trouble to your credit if you don’t pay it on time. In fact, unpaid parking tickets eventually are sent to a collection agency, which will report the negative debt collection action on your credit report. At that point, even paying it off won’t remove the negative item from your credit report, just update it as paid.

5. Financing big purchases
Rent-a-Centers, jewelers, furniture stores, and other retailers may offer you an in-store finance plan for major purchases. It may sound like a good deal (or just be appealing that you don’t have to shell out cash that day!) but it could really hurt your credit. These types of loans – along with payday cashing, etc. – are considered “bottom of the barrel” credit accounts and viewed unfavorably by credit reporting agencies. In addition, if your new credit account will automatically be maxed out – hurting your score – because they will only lend you the exact dollar amount of your purchase.

6. Opening a bank account
This may not make much common sense, since you are actually handing the bank YOUR money when you open a checking account, but, in fact, many financial institutions run hard credit checks when you first open an account. The good news is that most banks just do a soft credit pull, but many banks – and especially credit unions – will run a hard check, which could ding your score and remain on your credit report for two years.

7. Your business credit card
Until recently, using a business credit card had no bearing on your personal credit score or report, but all of that has changed. Now, all major credit cards have you sign a personal guarantee even for business accounts. So even if your employer or company is supposed to pay the balance every month, an accidental missed payment could mean your personal credit score is in jeopardy.

8. Getting a new cell phone
For a good number of cell phone providers, opening a new account for a consumer will include running a credit check. If it’s a hard credit check, or you set up a monthly installment plan that reports to the credit bureaus, it could negatively affect your score.

9. Cosigning for someone else
Some times, a friend or relative needs a little help getting approved for a new car, credit card, or even housing. But before you volunteer to be a cosigner on their application, you should know the potential consequences. First off, there could be a hard inquiry on your credit report, which could hit your score a little. But the bigger damage is if the other person fails to make a payment. If that’s the case, you will 100% be on the hook for the debt and responsible for late or missed payments, just like if you were the primary borrower!

10. Missing a rent payment
The credit bureaus are starting to integrate rent payments into their scoring models more and more, so if you miss a payment, it could very well come back to haunt you. Additionally, missing more than a month or being very late could result in a scorned landlord turning your debt over to a collection agency, causing serious damage.

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