You probably know that your credit report and credit score are important pieces of your financial puzzle.
You do know that, right? Of course you do!
Keeping an eye on your credit report can alert you to fraudulent use of your credit. You can also see if there are any mistakes appearing which could seriously hurt your credit. Watching your credit score lets you know whether your credit activity is helping or hurting your credit.
Have you ever checked your credit score or applied for credit only to find your score wasn't quite what you thought it was?
What do you do?
You start to look at your spending and accounts to see where your credit leaks are happening. Last thing you need is something sabotaging your credit.
You're probably watching obvious items like your credit cards, and making payments on time, but there might be some forgotten items causing problems with your credit, and dragging down your score. These little things can be easily over-looked since they aren't regular charges you would see and be used to. But if you forget about them they can have huge effects on your credit.
Here Are 5 Forgotten Items That Might Be Blowing Up Your Credit
1. Improperly Canceled Gym Membership
You don't want to go to the gym? Simple. Just cancel the automatic withdrawal from your account, and stop going.
This is a good way to find yourself in credit trouble. Most gyms have very specific cancelation policies. These policies usually require you to come in and fill out paperwork or at least require something in writing. If you don't, then you aren't canceled. The result is that you are still supposed to be making monthly membership payments -- but you aren't.
The gym reports your delinquent amount to a credit bureau, and your credit score is tanked.
Sometimes even if you go through the right steps it still can take a billing cycle or two for your cancelation to go through. Make sure you follow the exact policies for canceling with the gym. Keep an eye on the account you have attached to your membership to make sure your account is cancelled properly.
2. Parking Tickets
Sometimes, when you see a parking ticket, it gets tossed into the glove box and forgotten. Or you get it home and you don't think about it since most of your bills are online these days. You might just forget what the due date is if it's not clearly written on the ticket.
Whatever the reason though you can believe the city or organization that issued that parking ticket won't forget about it!
Forget about that ticket too long and local scofflaw practices could get you reported to a credit bureau (and also get your car booted or towed). Even if it isn't reported the ticket could find its way to a collection agency if it isn't paid and that could hit a credit bureau. (Of course you could also be racking up additional fees on the ticket as well.)
Take care of any tickets you get ASAP. If you aren't going to fight it then pay it. It's not worth the trouble with your car and the potential hit to your credit to play around.
3. Library Fines
Not all libraries report fines for overdue books to the credit bureaus. Some do, though. Others might just hand your overdue fees to a collection agency. If you haven't paid your library fine, and if the library reports it, you could see a drop in your credit score. Items like this appear under your payment history, and since payment history is the most important aspect of your credit score, it makes a huge difference in what your score ultimately ends up being.
Don't let the relatively small amount a library fee usually is do major damage to your credit.
4. Forgotten Utility Balances
When you move to a new house, you might still end up with a small amount to pay on your utility bill at the old place. This is more common when you move somewhere and switch utility providers. When it's the same provider they'll usually just tack on any difference to your next bill at the new house. But when you switch providers a partial billing cycle might be involved, so you might not fully realize that you still owe on your utilities. If you didn't provide your address, or if you aren't paying attention, you might not see the notice that you still owe money.
After a few months, the utility company will likely turn the account over to collections, and that will show up as a big negative on your credit report.
Imagine getting a bad hit on your credit for a couple of days worth of electricity?
Make sure you forward your mailing address with the post office in case a lingering bill still exists. It's also a good idea to follow up with any old utility companies to make sure you are paid in full.
5. Unpaid Medical Bills
Are you putting off paying your high-cost medical bills? If you are, that could turn into a credit disaster.
Health care providers and insurers report your payment delinquencies to credit bureaus, and that can affect your score. If you find yourself unable to pay, contact the provider and make other arrangements.
Keeping quiet and pretending the bill doesn't exist won't make it go away. It only makes it worse. Be honest with the provider. Many are willing to work with you, and you don't have to get the credit bureaus involved.
These non-credit items can end up causing you credit score issues. While making your payments faithfully on the above items won't help your credit score, missing payments, or defaulting on your account, can severely damage your credit score.
Make sure you are paying all of your obligations. And when you cancel a service or subscription, verify that you have followed all of the proper steps.
Don't let one stray bill or small fee blow up your credit!
You know you can't afford it. You might as well be burning your money.
A good credit history is essential to a successful financial future. Landlords, lenders, insurers and even employers use it as a way to judge you.
Yes, you want to make sure that you establish a credit history, but that does not mean taking out every credit card imaginable. Taking our high-interest cards with large balances can lower your credit score and lead to overspending.
If you want to increase your credibility in the eyes of lenders, paying bills on time is essential. Also, it is a good way to avoid unnecessary late fees!
A graduate degree is not only a financial investment, but a time investment. Before embarking on a post-graduate degree, it is important to do a cost-benefit analysis to ensure the diploma you are seeking is right for you.
Going after a degree at a time when you have to take out enormous student loans just to graduate puts you at a significant financial disadvantage once you finish school.
It is called your emergency stash for a reason! And no, a flash sale at Nordstrom Rack is not an emergency.
Be honest, when was the last time you actually had a full fridge? Despite what you keep telling yourself about how expensive groceries are getting, the bottom line is that eating at home saves money, especially if you are single.
We understand that retirement could not feel further way when you are in your 20s. But it is never too early to start saving. Need an incentive? When you are young, you have the advantage of giving your investments much more time to accrue interest and grow.
As much fun as it is to get a tax return at the end of the year from the IRS, you only get a big refund when your employer is withholding too much money from your paycheck during the year. If that's the case for you, adjusting your withholdings may be a good idea.
Most budget gurus suggest that your rent should be no more than 30 percent of your monthly income. If you are anything like us, you are paying much more than that.
Follow Glen Craig on Twitter: www.twitter.com/freefrombroke