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Are These 6 Things Dragging on Your Credit Score?

by Miranda Marquit

When we think of what hurts our credit scores, we often focus on missed payments and large amounts of debt. But you might be surprised to discover what else might be weighing on your credit. Remember that, even if you don’t think of it as a loan, or credit, other people that you owe money to can send unpaid accounts to collections, or even report you if you miss payments. Here are 6 things that might be dragging your credit down:

1. Unpaid Medical Bills

are you hurting your credit score?

Are you hurting your credit score?

Medical costs can be very expensive. If you can’t pay them, though, it’s a bad idea to ignore them completely. Many medical facilities are willing to work out payment plans if you can’t pay all at once. You might have to pay some interest charges, but it is usually better than having your account sent to collections and reported to the credit bureaus.

2. Improperly Canceled Gym Membership

Sometimes, instead of going through the motions and paperwork of canceling a gym membership, it seems easier to just stop the payment from your end, by notifying the bank or the credit card if there is an automatic payment. If you are actively paying each month, and you stop making payments without canceling properly, some gyms will report you. If you don’t go through the motions and sign the cancellation paperwork, you could easily find yourself reported to the bureaus — it’s not worth hurting your credit score over a gym membership.

3. Forgotten Utility Payments

If you move, you might still owe on some of your utilities, but might not realize it. This actually happened to me. Something happened in between when we moved, and when we had our mail forwarded, and one of the last utility bills slipped through the cracks. I didn’t think about it, or even remember it — until the collection agency called more than a year after our move. My credit score took a temporary hit, and I paid the bill and it hasn’t troubled us since.

4. Unpaid Traffic Tickets

This shows up as debt owed the city or county, and it can show up on your credit report. Also note that overdue books at the library (and the subsequent unpaid fines) can also be seen in the same light. Make sure that you pay what you owe to government agencies, even if the agencies are in a different state.

5. In-Store Financing

It’s tempting to use in-store financing when you make a large electronics purchase or furniture purchase. However, it’s important to understand that your credit score doesn’t view all debt as equal. Store department cards are seen as worse than cards issued by major banks, and in-store financing is treated as barely a step above pay day loans. Your credit could be dinged by the use of in-store financing, and that could affect you later.

6. Skipped Rent

Some people think that if they don’t have a mortgage loan, they don’t have to worry about a missed rent payment showing up on the credit report. However, your landlord can report your payment history to the credit bureaus, and your delinquent payments can be sent to a collection agency. It’s always best to pay what you can, and make arrangements if you won’t be able to make payments.

All of these items may seem small, but if left unchecked, they can have a damaging affect on your credit score. This is why you should check your credit report at least once per year, if not more frequently, and always dispute any errors.

Photo credit: FybridPhotos.


Published or updated April 2, 2012.
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{ 3 comments… read them below or add one }

1 Jeremy @ Modest Money

I just dealt with missing a bill due to moving as well. I had the mail forwarding all setup, but for some reason my credit card bill did not show up. I got all stressed about it because that was for a 0% balance transfer account. I thought the missed payment was going to void the balance transfer offer. Luckily when I called the credit card company they were willing to keep the 0% offer in place. Still it would’ve been reported to the credit bureaus.

As for parking tickets, do you think tickets in foreign countries could have any effect?

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2 Miranda

With the foreign parking tickets it all depends on whether it is reported to the bureaus. If the tickets go to collections, and that collection agency reports, then yes, it will be affected. But if the collection agency or government never reports to one of the Big 3 bureaus, then it doesn’t show up, and probably won’t impact your score. It’s all about the reporting.

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3 Ryan Guina

I had the same issue when I moved – I missed a credit card payment by a couple days. Discover was kind enough to waive any fees and they said they wouldn’t report it against my credit profile, but they slashed my credit limit after that… which was unfortunate because it was my only business credit card! I don’t have large expenses, so it shouldn’t be a problem, but I will need to look into another option soon.

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