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How Credit Scores are DevelopedLearning the rules of credit isn’t always as straightforward as you might think. Sometimes, doing something you might think would be great for your credit score can actually have an unintentional negative impact.

The first step in understanding what affects your score is to know where you stand by pulling your free credit report once annually from each of the credit bureaus from AnnualCreditReport.com. If you’d like to monitor your credit score on a monthly basis, you can also get your free Credit Report Card.

Once you know where it stand, it’s all about vigilance and keeping your eye out for the surprising things that could ding your score. Here, we rounded up some of the most unexpected things that can affect your credit.

Late Library Books

You might not think that the overdue copy of “50 Shades of Grey” that you checked out of the library would have an impact on your credit score, but that bill could be sent to a collections agency.

“Collections that can seriously hurt your score can arise from parking tickets and library fines, as much as from medical bills and credit card charge offs — with the impact to your score being similar,” says Barry Paperno, a credit industry veteran and Credit.com’s Community Director.

So, get those books back when they’re due or the librarian won’t be the only one coming after you.

[Credit Score Tool: Get your free credit score and report card from Credit.com]


Getting divorced involves dividing your assets as well as your debts, but just because your ex takes on the mortgage payments doesn’t mean that you’re off the hook.

“The account remains on their credit report and remains their responsibility until it is paid and closed. And even then it won’t be removed from their credit history,” says Gerri Detweiler, Credit.com’s Director of Consumer Education. “Plus if your ex declares bankruptcy, creditors will come after you for balances on any joint accounts.”

Free Credit Check & MonitoringClosing an account

Many people think that getting rid of a credit card that they don’t want, need or actually use is a good idea since it will show they’re not credit-dependent. However, this can be a bad idea for two important reasons.

“This can (but will not always) raise your utilization percentage, and a closed account is often purged from your credit report sooner (7-10 years) than an open one (remains indefinitely) causing you to lose all of the positive credit history associated with the account,” Paperno says.

One important note on closed accounts that might surprise you — it doesn’t matter if you close the account or if the issuer closes it, the effect on your credit score will be the same.

Just a single late payment

This isn’t like high school where the teacher might give you a slide if you turn in a homework assignment late only one time. If a credit issuer reports a late payment on your account, it will impact your credit score.

As we recently highlighted, this problem will affect those with excellent credit more negatively than those with credit that’s just fair or average.

[Related Article: How Much Will One Late Payment Hurt Your Credit Scores?]

Having credit cards, but no loans

An important component of your credit score is the diversity of accounts. This means that lenders are looking to see if you can handle both revolving and non-revolving types of credit. While having only one type of account can have a negative affect on your score, Paperno warns that it’s not worth taking out a loan just to improve this aspect of your score.

Disputing an account

If an account appears on your credit report erroneously when you do your annual credit check-up (something personal finance experts highly recommend), you should dispute it. Disputing it won’t take it off your report automatically; the credit reporting agency will usually need to check with the source to determine whether it is accurate. While that is happening, it may be listed as “under dispute” on your credit reports. Some people have been told to dispute negative items in order to game the system and get a loan.

“Disputed accounts do appear on credit reports, but in some cases are excluded from credit scoring, which can have the effect of raising your utilization if the disputed account(s) have lower utilization than the ones still being counted,” Paperno says. Of course, if information is wrong you will want to get it corrected, but if you are in the process of getting a mortgage or an important loan, understand that the dispute can affect your credit scores in unexpected ways.

Applying for credit (even when you aren’t rejected)

Every time you apply for a line of credit, a hard inquiry is placed on your credit file that will lower your score. Although, don’t worry about getting hit twice — once for the inquiry and once if you’re rejected.

“When you’re turned down for credit, the fact that you’ve been denied doesn’t appear anywhere on a credit report, resulting in no impact to the score — other than from the inquiry resulting from the application,” Paperno says.

Renting a car

This isn’t a universal. Renting a car will not always ding your credit score, but some rental car companies will do hard inquiries on your credit that will affect your score.

Dollar Rent a Car is one of the major brands that does this as a practice. It will do a credit inquiry when drivers ask to use a debit card to rent a car.

[Free Resource: Check your credit score and report card for free with Credit.com]

Image: Irargerich, via Flickr

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