
5 Things You Didn’t Know Lower Your Credit Score
There are few things more disarming than unexpectedly discovering that your credit score has taken a hit. Unfortunately, this is a situation that we sometimes find ourselves in. That’s why it’s helpful to be aware of some little-known things that can have a big impact on your credit score.
1. Overdue Library Books
It’s no longer just side eye from a disgruntled librarian that you have to fear if you’ve got overdue books — many libraries now rely on collection agencies to collect the fines from long overdue materials. These collection agencies report to credit bureaus and their reports can have a devastating impact on credit scores.
2. Unpaid Medical Bills
Similarly, many hospitals also use collection agencies to collect unpaid balances from patients. If you aren’t sure of your bill and do not hear from a hospital shortly after your stay, be sure to call your insurance company as well as the hospital to inquire about potential payment owed.
3. Applying for Multiple Credit Cards at Once
Companies usually run a credit check before giving the go-ahead to approve a credit card. Multiple credit inquiries can have a negative impact on your credit card score. A credit inquiry usually knocks your FICO score down around 5 points, and multiple credit inquiries can add up.
4. Parking Tickets
Noticing a trend here? Unpaid parking tickets are sent to collection agencies that report to credit bureaus. More and more companies and bureaus refer outstanding debts to collection agencies, so it is important to be vigilant in paying for all outstanding debts.
5. Closing a Credit Card
If you are having trouble paying off a balance, closing your credit card may seem like a good idea. In fact, closing a credit card — especially one with a balance — increases your utilization and may decrease your diversity and can really hurt your credit.
If you’ve had a few slip-ups and hurt your credit score here and there, don’t panic. There are things that you can do to help your credit score recover and maintain your score so that it doesn’t slip any further. Chief among these is being vigilant and ensuring that future debts don’t make their way to a credit bureau.
