6/11/2012 3:40 PM ET|
7 weird ways to hurt your credit score
Kept a library book out too long? There are plenty of surprising ways to damage those all-important credit numbers.
The FICO credit-score equation might be a black box, but thousands of articles have been written about what you should and shouldn't do when it comes to your credit score. Most of them are pretty obvious: pay your credit card bills on time, don't apply for a lot of credit, and keep your nose clean. There are, however, a lot of weird ways you can hurt your score without you even realizing it.
Closing credit cards
This has become less "strange" in recent years, but closing your credit cards can hurt your score. What seems like simple financial housecleaning affects a variety of factors that go into your credit score. When you close a card, your credit limit drops, which increases your credit utilization (bad). If that card is older than most of the other cards you have, the average age of existing accounts will also fall (bad). These are not as bad as an account in collections, but they could mean the difference between a good credit score and a bad one.
Not filling out a moving form
When you move, it's important to report your change of address to the United States Postal Service or you risk missing important mailings such as credit card and utility bills. The last thing you want to do is get behind on payments, because that will be reported to the credit bureaus. Some credit card companies will report you as soon as you are 30 days late. While you're at it, be sure to hold your mail when you go away. You don't want someone stealing your mail and your identity.
Asking a banker to check your score
If you have friends who work at banks, especially if they are in lending, you might be tempted to ask them to check your credit score for free. Rather than jump through the hoops of free credit-score companies or paying for it yourself, it might seem harmless to ask a friend to look it up. Besides probably being misuse of company resources, that small favor will result in a hard inquiry on your report, which will hurt your credit score. When you look up your own score, the credit bureaus treat it as a soft inquiry because you are asking about yourself. When you ask your bank, all the bureau see is a bank requesting your score, as if you had applied for a loan.
Not paying library fines
Years ago, owing the library a few dollars wasn't a big deal. Today, with local budgets in a pinch, everyone is trying to find ways to make more money and fund valuable community services. This means that some libraries are sending even the most trivial of debts to collection agencies. Those agencies tack on their own fees and penalties and report the debt to the bureaus, and that can have a devastating effect on your credit.
Unpaid parking or speeding tickets
Did you get a parking ticket in another state? What about a speeding ticket or other citation? Since citations are considered debts to the county and governments are not in the business of ignoring debts of any kind, this will almost always be turned over to a collections agency. That agency will tack on penalties and fees and report it to the bureau, and, much like unpaid library fines, this will be extremely painful for your credit score.
Paying less than owed
Let's say you already have a past-due amount on your report and you want to get the debt off your back, so you agree to pay 75% of the debt. That actually hurts your score because the 25% you don't pay will be reported as a new charge-off on your credit report. You can prevent this when you negotiate with the debt holder, but if you fail to do so, most will report the charge-off. The debt will be settled, but the impact on your credit report will persist. It does seem counterintuitive to be punished after paying, but that's how it works.
Cards with no limit
Some credit cards come with no listed limit, which at first may seem like a good thing. In reality, those credit card companies aren't reporting a credit limit to the credit bureaus, so the bureaus assume the limit is $0 for their calculations. This makes make your credit utilization on such cards artificially high, which hurts your score. If the only credit card you had was one of these limitless credit cards, your credit utilization would be infinite.
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Message to the carpetbagging bankers and their shills (the credit bureaus)...
GO STRAIGHT TO HELL !!!
Financiers, as a group, need to be thoroughly pimp-slapped on a daily basis, by anybody who feels the urge to do so.
Screw credit scores....they're extremely biased and serve no basis what so ever. For example, if you're a millionaire, you could bounce a check and guess what, it doesn't effect you. But if you make less than $50,000.00 a year and you bounce a check, you are screwed. Screwed for 7 years. No credit, no life. No credit, no family. Bad credit, high insurance premiums. Bad credit, high interest rates.
So the best thing to do is this...it's time for people to start fighting back. Start using cash. Boycott banks and credit unions. It's time we take back our lives...decide our own fate. Banking and commerce has too much control over our lives. It's time to hurt them in thir pockets and it's time to stop giving away our money.
A credit score pretty much controles a persons life. It dictates what and where you can make purchases..Another sign of Socialism. Why not United Socialist States of America? This country is going down the tubes
I've been reading most of everyone's comments on here, and your all pretty much darn right. The rules governing the credit system are an absolute JOKE. In fact, their disgusting. I actually got so fed up with the US govt and credit system, that I left the country and moved for good. And let me tell you, i'm so glad I did. Dont have to ever deal with the us govt again, never have to deal with the credit system that is obviously desgined to hurt you and help the banks ever again either. The banks and major corporations are just as bad as the federal government too. Plus if you owe them $0.01, you better believe there going after you, but if they owe you $100, it takes months or years for them to pay you, if you ever even get paid back. The entire American government/banks/companies are hypocritical masters. And all they do is make up and change new ruels & laws as they go. I use to be proud to be an American, and now i'm honestly embarrassed to say i'm one because of how the american government, banks, credit system treats, takes advantage of, and screws over it's citizens.
It's just another way for them to instill fear in us. DO NOT PAY ATTENTION! They are greed, conniving, deceiltful fear-mongering imperialists. Just for starters.
I find it's better to cut up all cards and close out all accounts, pay off as much debt as possible- even debit cards...they are keeping track of us this way AND PEOPLE DON'T REALIZE THIS...WATCHING YOUR EVERY PURCHASE.
( thru cards) ......who really cares about a credit score anymore...USE CASH...
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