You work hard to make sure your credit score remains high, right? Unfortunately, all your hard work could be hurt by seemingly small things that could have a big impact on your credit history. You might be surprised to find out that even a parking ticket could take your score down a few notches. By understanding what will and won’t affect your credit score, you can help reduce problems that aren’t conducive to a clean bill of credit.
City Fines and Parking Tickets
Whether you forgot to return your copy of The Grapes of Wrath or to pay a minor parking ticket a few years back, these small infractions could eventually add up and show up on your credit history. Cities and other municipalities can send even small fines to collections, so make sure that you pay up on time and clear out small amounts so they don’t turn into a big deal.
Changing service providers can be a pain, but in your rush to get it over with, don’t forget to settle up your accounts. Some providers, be they gas, cable, electric, satellite or any number of other services, keep accounts on file when they aren’t closed out properly. Make sure that when you make the switch, your account is caught up and you’ve requested the account be closed, otherwise the account might become inactive or delinquent.
Closed or Inactive Credit
It only makes sense: When you’re done with a credit card, you close it out, right? Not necessarily. Closing an unused or inactive credit card could reflect as less available credit on your credit history, which is usually seen as a negative. Instead, keep unused credit cards open and use them for small purchases that you pay off immediately.
They say that the only thing you can count on in life is death and taxes, but you’d better add “bad credit” to the list if you neglect to pay what you owe Uncle Sam. The IRS takes a hard line with back taxes and could even put a lien on your home or garnish your wages to get what they’re due. This shows up on your credit score, so make sure you’re all caught up or at least using a payment plan to settle.
Most people know that excessive hard inquiries to check credit can negatively impact credit scores, but you might not even realize who runs a hard inquiry. While a credit check for credit cards, loans or a mortgage is expected, you might not realize that opening a new cable account, getting a new cellphone, renting a car, or requesting a credit limit increase can all result in hard inquiries as well. Make sure that they’re only done when absolutely necessary to avoid dragging down your score.