1. Library Fines and Parking Tickets
Surprisingly, the mundane missteps of not returning a library book or overlooking a parking ticket can have repercussions on your credit score. In the past, such fines and tickets were rarely reported to credit bureaus, but that has changed. Municipalities and organizations may now choose to send unpaid fines to collections, which can leave a blemish on your credit report.
2. Rent Payments
Rent payments are not universally reported to credit bureaus, but they certainly can be, and their impact is rising. Some landlords and management companies report on-time or late rent payments, which can either help build a positive credit history or become a credit catastrophe. Rent-reporting services also allow for this information to be included in your credit report.
3. Utility Accounts in Good Standing
Utility accounts, like electricity and water, are not typically factored into your credit report when in good standing. However, if you default and your account is sent to collections, it can negatively impact your credit. On the flip side, some new credit scoring models are beginning to incorporate utility payment histories as a way to help those with limited credit history build their scores.
4. Subscription Services and Memberships
Your monthly subscriptions and memberships, from streaming services to gym contracts, usually don’t appear on a credit report unless they are sent to collections. However, with the advent of certain financial apps and services that report these regular payments, they could start to have an unexpected influence on your credit score.
5. Someone Else’s Debt
If you co-sign a loan or are added as an authorized user on someone else’s credit card, their financial behavior can affect your credit. Whether they pay on time or default, their actions echo through your credit report because you’ve legally attached yourself to their financial responsibilities.
6. Medical Debt
Medical debt is a unique beast in the credit landscape. It doesn’t typically affect your credit score until it goes to collections. Even then, there is often a grace period before it appears on your credit report, and recent changes in credit reporting practices have aimed to lessen the impact of medical debt on credit scores.
7. Tax Liens and Civil Judgments
Although tax liens and civil judgments were once staples on credit reports, recent changes have removed these public records from credit reports unless they meet strict criteria. However, unpaid tax liens can still indirectly affect your credit if they lead to a garnishment or levy that results in a defaulted account.
8. Checking Account Overdrafts
Your checking account is typically separate from your credit report. However, if you overdraft and fail to repay the bank, the account could go to collections and ding your credit. Additionally, some banks offer overdraft protection that links to a line of credit, which directly impacts your credit utilization and score.
9. Rental Equipment
Renting equipment, from tools to furniture, often requires a credit check, but the rental itself doesn’t usually impact your credit. However, if you fail to return the equipment and the rental company charges off the debt or sends it to collections, this can lead to a surprising credit score drop.
10. Club Dues and Retail Installment Contracts
Similar to subscription services, club dues or installment payments for retail purchases are unlikely to touch your credit report unless you fall behind. If the organization or retailer sends your account to collections, the resulting negative mark can linger on your credit for years.
In conclusion, while it’s widely known that loans and credit card payments influence your credit, these 10 surprising factors can also have a significant impact. Understanding the breadth of financial activities that can affect your credit is crucial for maintaining and improving your credit score. Regularly monitoring your credit report and staying on top of all your financial obligations, from the mundane to the major, can help you safeguard your credit standing.
References
– myfico.com
– experian.com
– equifax.com
– transunion.com
– consumerfinance.gov
