5 Unusual Things Affects Credit Score
We all know that your credit score goes down when you’re generally irresponsible with debt. But even if you’re as responsible as you can be, your credit score could take a hut! Here’s 5 unusual things affects credit score.
Thing 1: Forgotten credit cards can hurt your credit score!
After you’ve had credit for a little while, you tend to get offers for much better credit cards. Points, cash back, air miles… all of these credit cards offer way more than your first one.
So, after a while, you may decide to stop using your first credit card. Maybe you decide that keeping it open is the best policy so you keep the benefits of having it open. (Protip: the older your oldest account is, the more it benefits your credit score!).
Wait… how is this one of those unusual things affects credit score?
So you pay off the credit card and stop using it. You move a few times. You stop making payments on the card, which wouldn’t be a problem if you didn’t owe anything.
However, even if you thought you paid it off, you still might have a balance. You might have had a charge accrue that appeared much later. You might have a subscription on there that you had forgotten about. Maybe you forgot to pay off the additional interest that was about to accrue from last month.
This happens ALL the time. And it snowballs into a disaster for your credit!
Why?
Because you’ve missed payments, you’re past due, and you might end up with a default on your record. All because of what you thought was a good decision.
How do you fix this?
- First, check each of your 3 credit reports every year! Stagger them over the year so you read one from a different bureau every 4 months! Read it carefully to see if you may have missed anything! Don’t let these issues snowball.
- Second, prevention is the best medicine. When you decide to stop using a credit card, make sure that you still get statements for it in the mail or through email. Always check the card to see if there are any charges that went unaccounted for.
- Third, if you want the benefit of having an old account while still having a points card, try to upgrade your card. Talk to your bank and see if you can upgrade your current card with something that has points or cash back.
Thing 2: Old phone service contracts
Phone service providers are notoriously bad at keeping good records. It’s so bad that you’re calling multiple customer service agents to fix one issue, and none of them have the same information. It’s no surprise that they make mistakes sometimes.
But having an old phone service contract open could spell trouble for your credit score. You have to make payments on your phone every month. Missing payments will show up on your credit report and can hurt your credit score. If you decide to switch providers, you have to make sure your contract is indeed cancelled.
Otherwise, you will continue to be on the hook for payments that you shouldn’t have to make.
Companies make this mistake all the time, and it’s up to you to be vigilant.
How do you fix this?
This is one of those issues that you can dispute. With the help of people like The Credit Pros, you can get the big credit bureaus to wipe that erroneous mark off your record for good.
But even disputing it can take some time. So you have to keep an eye out.
Every time you cancel a service contract, make sure to get a copy of the termination in writing. They will give it to you if you ask, but most of the time they’ll tell you that you’re all set. Don’t believe what they tell you; they can make mistakes!
Thing 3: Identity fraud committed against you
Identity theft is one of the most common petty crimes in the United States. It’s also one of the hardest to prosecute.
If someone gets access to your information, they can take out loans and credit cards in your name. Not only that, they won’t have to pay it back: you will. Since they’re using your information, they can just leave you to foot the bill. This can hurt your credit score!
Is there something you can do about it? Of course!
Just like the previous scenario, bad marks on your credit history due to identity fraud can be disputed. To dispute anything on your credit report, you will need to call the three credit bureaus.
However, this can be a giant hassle, and if you don’t understand the lingo, you will have a hard time. Luckily, The Credit Pros can help you dispute anything on your credit report.
How do you fix this?
Also just like the previous scenario, prevention is the best medicine. You need to protect your identity from being stolen. That includes keeping guard of your personal information. Be aware of what you’re typing in on websites. And be careful on the Internet!
We have an article that goes more in depth about how to protect yourself from identity theft. Check it out!
Thing 4: Having The Same Name As Someone Else
This one is almost cheating, because it’s not something you can help, really.
But credit bureaus, collections agencies, and loan officers make mistakes literally all the time. They can accidentally put the wrong entries in the wrong files. They could confuse you with another person. All of a sudden, you’re on the hook for something someone else did.
How do you fix this?
There’s no real way to prevent this. It requires you to check your credit reports as often as you can.
You get a free credit report from each of the three bureaus every single year, and you should use it! These mistakes happen all the time, they can hurt your credit score, and you have the right to know about it!
If you find a mistake, you also have the right to dispute it! As explained earlier, you can dispute it by yourself or you can get help.
Getting help is often the best option for people with limited credit knowledge and limited time. Check out our article about whether you should hire a credit repair company, or do it yourself!
Thing 5: Divorce
Divorce is one of the most stressful events a person can go through. Not only has a relationship ended, but divorcees have to go through a huge legal kerfuffle just to get their affairs in order.
Married couples use each other to cosign on loans, are authorized users on the same credit cards, and have mortgages together. Ending these arrangements can be disastrous for a person’s credit, because they might end responsible for debt that they don’t know about! This, of course, can hurt your credit score!
How do you fix this?
If you’re going through a divorce right now, be sure to outline in writing what debt each party is responsible for. Then, you will need to contact each of those loan providers and make sure they have this information in writing as well.
Usually, loan providers will be unable to remove a cosigner from a loan. This means that if the person responsible for paying said loan ends up defaulting, the other party’s credit will also suffer! The only way to remove a cosigner off of a loan is either to pay the loan off, or to refinance it.
All of this makes for pretty disastrous arrangements. A good divorce lawyer will make sure to hammer out all of these agreements in an orderly manner. This may include instructing each party to refinance old debt that has the other’s name on it. After these agreements are settled, it’s up to the judge to determine who must take responsibility for each loan.
These cases are often the subject of continued settlements. If you find yourself in a situation where your divorce is hurting your credit, don’t be afraid to call a credit repair company.