We all share a love-hate relationship with our credit scores. We don’t feel we need them, but if they are low or absent, we could land in trouble. They are like an evil necessity we can never get rid of.
You are constantly under pressure to maintain a good credit score. This can be done by paying all your bills on time, never maxing out your credit card and ensuring that you never miss a mortgage payment.
Some people, however, manage to have a lower than expected credit score, which hits their plans to get a new car or maybe a new house. Wondering what happened to your score? Take a look at these surprising things that affect the number of your credit report.
Paying off a loan
Wait a minute, how can paying a loan off impact somebody’s credit report? After all, if an individual has paid a loan in full, it means he likely has a great money management record. The number you get in your credit rating depends on your credit mix.
If you have a mortgage payment and a credit card, paying off the mortgage could have a small negative impact on your score. After all, when a loan is paid off, there is nothing more than a credit bureau can calculate your score on. Hence, a small hit is expected.
Get ready for a 50 to 100-point drop in your credit score if you have not paid your pending parking tickets. An unpaid ticket is usually counted as outstanding debt to the city and it can eventually move to the collectors.
Once it reaches them, it can be reflected on your credit report and your score can tank in just one go. Note that a parking ticket default will stay on your report for the next seven years- yes seven years! Add 180 days extra from the original date of default and you are in for a serious score sabotage.
Not paying for utilities
Have you not paid you cell phone bill? Did you default on the landlord’s payment again? Are you not paying your cable service provider? These payments will directly affect your score. Leave them unpaid for 90 to 180 days and you could end up in a soup. Not forgetting, it will reflect on your report and you will have to bear its burden for years to come. Utility payments are an absolute necessity.
Requesting an increase of credit limit
Ask your credit provider to increase your limit and get ready for a few points taken off your score. When you ask for a limit increase, your service provider will generate a hard inquiry into your report, affecting your number. What is the safest plan? Handle your credit wisely and do not, if possible, ask for a limit increase ever.
It may be frightening to see how many things get counted in your credit report, even though they are not really debts. So, make sure that you handle your money wisely and maintain a high credit score.