It’s totally logical to assume your credit score is only affected by loans, loans, more loans and all the information associated with said loans. (It’s your credit score, amiright?) But in reality lots of information can find its way onto your credit reports — and plenty of actions can directly or indirectly damage your standing.
What’s in a Credit Score?
Your credit score is a numerical representation of your ability to repay a loan as agreed and it’s based on five major factors:
- Payment history
- Amount of debt
- Age of credit accounts (also referred to as credit history)
- Mix of credit accounts
- New credit inquiries
In most respects, those categories work just as you would infer. Your payment history, for instance, is a record of whether or not you’ve paid your bills on time. Missed payments are bad for your credit score, while an unblemished run can really rack up points. You can find a full explainer of the big five factors, but what’s important to take away now is there are more items that can fall into those five buckets than you may think.
Here are 15 surprising things that can affect your credit score.
No one’s infallible, including your creditors and the major credit reporting agencies, which means it’s totally possible an error is weighing down your credit score. Plus, identity theft can result in fraudulent credit accounts or new credit inquiries, among other things, so it’s important to monitor your credit reports regularly. You can pull yours for free each year at AnnualCreditReport.com and view your free credit report snapshot, updated every 14 days, on Credit.com.
Expert Intel: If you do find an error, be sure to dispute it with the credit bureau(s) in question. If you’ve got multiple errors, you’ll need to dispute each one separately with the bureaus reporting them. You can do this on your own for free or enlist the help of a reputable credit repair company.
Leave a parking ticket unpaid long enough and your city will likely send it to collections — and since collections involve outstanding debts, they can appear on your credit reports and do big damage to your credit scores. (We’re talking a 50 to 100 point drop if your credit score was in good shape at the time the account hit your file.)
Collection accounts can remain on your credit report for seven years, plus 180 days from the date of the original delinquency, though your score should steadily recover as you get further and further away from the initial misstep, so long as no new negative information emerges. You can go here to learn more about how long things stay on your credit report.
Similarly, unpaid utility bills can get sold to a third-party debt collector, who may report the account to the credit bureaus.
The same goes for library fees — meaning, yes, an overdue library book or, say, that unreturned “Freddy Got Fingered” VHS rental could come back to haunt your credit.
Medical debts can directly affect your credit if you’ve taken out or used a credit card to pay for them. They can also indirectly affect your credit if your medical bills go unpaid, since health care providers also send unpaid bills to collections after a certain period of time (usually between 90 and 180 days.) Medical bills are a common blemish on credit reports. A 2014 report from the Consumer Financial Protection Bureau found 43 million Americans had unpaid medical debt on file.
Expert Intel: Medical debts are treated differently by most credit scoring models. In fact, some newer models ignore paid medical collections entirely. Plus, thanks to a 2014 settlement brokered between the three major bureaus and 31 state attorneys general, by 2018 medical debt will no longer be reported until 180 days after it was incurred.
Delinquent Child Support
Unpaid child support is considered a debt and can be reported to the credit bureaus, usually by the municipality or agency responsible for collecting the payments.
Paying Off a Loan
OK, this one is a bit complicated, because, well, credit scores are complicated. But here’s the gist: There are two major types of loans out there — revolving loans, like a credit card, and installment loans, like a mortgage. Credit scoring models are designed to reward you for responsibly managing both. (See “mix of accounts” above.) If you pay off your auto loan and it’s the only installment loan you have on the books, your credit score could actually take a small hit.
Second, closing a loan could negatively affect your credit utilization rate (the amount of debt you’re carrying versus your credit limits) if your remaining loan balances are high.
Closing a Credit Card
That credit utilization issue is the same reason closing a credit card can wind up hurting your score. Sure, closing a card you’re not using can seem — and often may be — a good move, but if your other cards are bumping up against your credit limits, you could wind up taking a credit score hit. (Need help figuring out if you should thin your wallet? Check out our credit cards.)
Expert Intel: For best credit scoring results, keep the amount of debt you owe on individual credit cards and other credit in general below at least 30%, and ideally 10%, of your total credit limit(s).
Applying for an Insurance Policy …
You probably knew credit card and loan applications count as credit inquiries — and too many in a short period of time can make you look risky to a creditor. But lenders aren’t the only ones who will pull your credit when trying to decide whether to do business with you. So will insurance companies, for instance — and those credit pulls could be classified as a hard inquiry, which can ding your credit score.
… Or a Cellphone Plan
Cellphone providers also often pull your credit when you go to sign up for a plan, which again can count as a hard inquiry on your report. Other entities that fall into this bucket: landlords, cable companies and utility service providers.
Not Paying Your Taxes
The Internal Revenue Service doesn’t directly report your tax payment records to the credit bureaus. But leave Uncle Sam’s annual bill(s) unpaid long enough, and it may file a Notice of Federal Tax Lien against you, which will appear on your credit report and seriously damage your score. You can learn more about tax liens and how they affect your credit.
Forgetting All About the Rent
This one will undoubtedly frustrate a few folks, since for the longest stretch, on-time rental payments did nothing for your credit. In fact, in most cases, they still don’t. But in recent years, the credit reporting industry has moved to include rental data of certain versions on your credit reports. Still, even if a lender or service provider isn’t looking at that data, a missed rental payment can wind up going to collections — and we already covered how those accounts can hurt you.
Also worth mentioning: Landlords tend to pull a special version of your credit report when you apply for a lease, so missing the rent could cost you an apartment, even if it doesn’t mess up your traditional credit score.
That Old Gym Membership From Back in the Day
An unpaid gym membership can wind up in collections, so it’s important to cancel one you’re no longer using as your contract dictates. And, no, closing the credit or debit card you were using to auto-pay what you owe the gym each month probably doesn’t count.
Checking and saving account information isn’t included on traditional credit reports, but if you opt for overdraft protection tied to a line of credit and don’t make good after going over, you could wind up hurting your credit.
Requesting a Credit Limit Increase
When you ask your issuer to change the terms and conditions associated with your credit card — say you want a credit limit increase or a lower annual percentage rate — that issuer is likely to pull your credit to see if your standing justifies the change. And that’ll generate a hard inquiry on your credit report, which, you guessed it, can ding your score.
Note: In the case of a credit limit increase, the damage done by the inquiry could be easily mitigated by an improvement to your credit utilization rate, so there are certainly times when making a request is worth it.
Still confused about credit scores? Visit our learning center for more answers.