Remember how the little things you did in college affect your GPA? Well, that’s the same way everything you do in your life, which concerns your finances, affects your Credit Score.
For instance, just the same way a student’s performance in an extracurricular activity could impact their CGPA at the end of a semester, not paying a medical bill or co-signing a loan with somebody could also drag your Credit Score down the pit.
Unfortunately, not many of us understand how the little things we do or, forget to do, affect our Credit Score.
In this article, we aim to brush up everyone’s knowledge on some of the most basic things that can contribute to someone having a low or high Credit Score.
However, if your Credit Score has already suffered the dip as a result of your ignorance of the trivial matters of your finances, feel free to check the ilovemakingmoney.com website for tips on how to raise your Credit Score by 100 points.
Requesting for a raise on your credit limit
When you ask a Credit Card Company to kindly raise the limit on your card, you risk getting your Credit Score nipped by a few points. Although they won’t tell you, before they honor your request, the card provider will perform a hard inquiry on your Credit Report. This is to double-check whether you’re able to lead the new credit limit they’re about to grant you.
Unfortunately, this simple act of “hard-pulling (hard inquiry)” your Credit Report sends a negative signal about you to the Credit Bureaus (TransUnion, Equifax, or Experian).
Installment payment plans
Debt is the greatest enemy of anyone’s Credit Score. Strangely, many of us still cannot do without treading it’s dangerous paths. We take up installment loans such as phone payment plans, payday loans, personal loans, etc., with the hopes of repaying as agreed.
But what many of us fail to understand is that the moment we apply for that iPhone loan is the moment the lender sends our details to the Credit Bureaus, leaving a dent on our Credit Report in the process. Miss just one payment and your Credit Score is already paying the price.
Owing rent and utilities
Do you have unpaid electricity bills? Owe your landlord a few months’ rent? Or maybe you haven’t even settled the outstanding bills you owe your gas company. If so, you might be doing more damage to your Credit Score than you realize.
Landlords and utility companies don’t usually tell the credit Bureaus when you pay your rent on time. But they have no problem reporting you to them the moment you delay or miss a payment.
If your Credit Score has suffered a dip because you withheld rents in the past, you can bring it up by adopting one of the Credit Score repair tips on the ilovemakingmoney website. This tip, which focuses on your rents, helps you report rent on your Credit Report so that the Bureaus can be notified of all your subsequent on-time payments.
Unpaid medical bills
When you owe medical bills – whether to a government-owned or private medical center – you risk getting chased by a debt collection agency. Although there’s no definite timeframe as to when bailiffs might come knocking at your door, the day they do is the moment your Credit Score takes the hit.
Generally speaking, bailiffs have no problem sending a foul report about you to the credit Bureaus once you’re reported to them. And even after you’ve settled the bills you owe, they might still send an update regarding your situation to the Bureaus, informing them how long it took you to pay up.
The best thing anyone can do is to never delay the payment of their medical bills. That way, you’ll never have to deal with a bailiff problem.
Not paying library fines
LOL, I know this may actually sound funny to you, but it is the truth. When you borrow books from a library and return it late without paying the fine, the library might send your details to collections, thereby portraying you in wrong lights in the eyes of the Credit Bureaus and then impacting your Score in the process.
Unpaid parking tickets
I know a lot of us are guilty of this – using parking lots without paying for the tickets. But what we don’t know is that these things – unpaid parking ticket fees – cause serious damage to our Credit score. Over time, when you don’t pay for your parking tickets, the concerned bodies will send your case to a debt collection company, impacting your Credit Score in the process.
Co-signing a loan
I know you feel like you’re helping a family member, colleague, or friend. But the moment you decide to co-sign a loan with somebody, you take up a fraction of their risk, which will definitely reflect on your Credit Report.
Now, in their weirdest scenario that they miss a payment or default on the loan payment, the details of their default may show up on your report, negatively impacting your Credit Score in the process.
Interesting related article: “What is my Credit History?”