Sneaky Things That Affect Your Credit Score

Did you know these everyday occurrences could be hurting your credit score?

By Bethy Hardeman from Creditkarma.com
Also published in Reader's Digest Magazine January 2014
  • Loading
    Image Source/Thinkstock

    Closing an Old Credit Card Account

    While canceling a long-held but seldom-used account may seem responsible, it will shorten the length of your credit history, which can lower your score. If you feel like decluttering your wallet, nix a few of your more recently acquired cards, and hang on to the oldest one you've got—that long credit history will serve you well in the long run.

    Financing that New Bedroom Set

    If a local business offers to let you finance a purchase, think twice before accepting. The bank may consider it a “last resort” loan, which is a huge red flag for higher credit risk.

    Battling a Bill

    If you’re in the midst of a credit quarrel, the disputed credit line may be ignored during your score calculation. This will make it appear as though you are using a higher percentage of the total credit available to you, which can result in a lower-than-average number.

    Getting a New Cell Phone

    Applying for that fancy phone can trigger what’s called a hard inquiry, each one of which lowers your score by a few points. Anytime a company runs a credit check on you—if you apply for a loan or car insurance, for instance—a hard inquiry may follow. Also, check whether moving money from a big bank to a smaller credit union will trigger a hard inquiry. 

    Not Paying Traffic Tickets

    Parking fines can really take their toll—especially in cities like Chicago, Washington, D.C., and New York, where unpaid parking tickets are sometimes turned over to various collection agencies. The result: a damaged score. To find out if your city (or one you’re visiting as an out-of-state driver) uses an agency, search on its .gov home page, or contact the department of revenue to verify.