7 Strange Ways in Which Harm Your Credit Score – Part 2
In yesterday’s article we started discussing how it can be so easy to start seeing your credit score deteriorate over seemingly unimportant things. This comes as a surprise to many of course, who think that their credit score can only go down due to an unpaid personal loan or because of them defaulting on their car payments.
However, there are several other reasons why your credit score can be negatively impacted. Take a look at our first post in this series to know about the first three out of these seven strange ways in which your credit score can be damaged. In this one, we take a look at the last four of them.
Let’s get going.
4. Failing to Pay Your Library Fines
Believe it or not, owing money to the library can harm your credit score. aurally, for a lot of people owing a few dollars to their local library is never a big deal. However, with even local businesses being affected by the economic crisis, even your local library won’t forgive those few dollars of debt, which means that in many cases even local libraries are reporting any debts over to collection agencies despite them not being even close to the amount of a personal loan. In turn, those agencies add then their own fees and other charges and report your debt to the bureaus, causing quite some damage to your credit score. Suffice to say, this can make you completely ineligible to apply for a personal loan in the future.
5. Unpaid Speeding Tickets and Parking Tickets
Did you thought that parking ticket you got in another state shouldn’t be any trouble? Or perhaps you thought that a recent speeding ticket might pass in adverted by the authorities? Well, think again. Citations and other forms of infractions are considered debts by the government, and ignoring those debts in many cases can be even worse than to leave a personal loan unpaid.
Of course, if you fail to pay even the smallest fine or ticket, in the long run that information will be carried over to the credit bureaus and your credit score will be severely affected by that. What is even funnier: You might never get more than a simple notice that you owe this money, since the government will never push you to pay a debt as if it were a personal loan.
6. Pay Less Than the Amount You Owe
This is something that happens quite often among people who owe money due to a personal loan or other debt: In their desperation to collect any funds, banks and other personal loan lenders might agree with you for you to pay only a set percentage of your debt.
At first, this seems like a great deal, but it can actually hurt your credit score quite substantially. The reason for this is that by paying only a percentage of your personal loan or other debt, the balance you leave unpaid is then reported as if it were a new charge to the credit bureau, harming your credit score quite dramatically in the process. Although you should know that you can negotiate this with your personal loan lender should it come down to it.
7. Be Careful of Credit Cards With No Limit
In some cases, a few personal loan lenders or banks will give you credit cards with absolutely no listed limit. However, instead of being a good thing, it can be quite the opposite, since in most cases the banks or personal loan lenders will not report a credit limit to the credit bureaus. Surprisingly, this causes credit bureaus to assume you have a $0 limit for your debts and personal loans on their calculations. This of course, causes your credit limit to be non-existent, which is another factor that hurts the credit score.