Your Old Sofa Can Ruin Your Credit Score

What's Hot

Do This or Your iPhone Bill May SkyrocketSave

23 Upgrades Under $50 to Make Your House Look AwesomeAround The House

Trump Worth $10 Billion Less Than If He’d Simply Invested in Index FundsBusiness

11 Places in the World Where You Can Afford to Retire in StyleMore

What You Need to Know for 2017 Obamacare EnrollmentFamily

8 Things Rich People Buy That Make Them Look DumbAround The House

32 of the Highest-Paid American SpeakersMake

Amazon Prime No Longer Pledges Free 2-Day Shipping on All ItemsMore

More Caffeine Means Less Dementia for WomenFamily

9 Tips to Ensure You’ll Have Enough to RetireFamily

30 Awesome Things to Do in RetirementCollege

5 Spots Where Retirees Can Live for Less Than $40,000Real Estate

10 Ways to Reduce Your Homeowner’s Insurance RatesFamily

10 Ways to Pull Together the Down Payment for a HomeCredit & Debt

Chew on This: The Story Behind Your Hershey’s Halloween TreatsBusiness

If you’re not careful, "old sofa syndrome" can wreak havoc on your credit scores. Here's how to avoid it.

This post comes from Gerri Detweiler at partner site

It is such a well-known phenomenon that credit counselors have a name for it: “old sofa syndrome.” And if you’re not careful, it can wreak havoc on your budget — and your credit scores.

New homeowners are particularly vulnerable, but so are those who have lived in the same place or with the same furniture for years and decide to replace “just one thing.”

Counselors with Consumer Credit Counseling Service of San Francisco warn clients to beware of old sofa syndrome (OSS) in their new-homebuyer classes. Rick Harper, senior vice president of CCCSSF, explains:

[We] remind them that often new homeowners run up their credit card balances soon after they close on their new home. This is especially true for first-time homebuyers.

All of a sudden the old sofa doesn’t quite look right in the new living room. So out goes the old sofa and in comes the new sofa, which is financed by the credit card. Then the old drapes don’t look right behind the new sofa and the process is repeated over and over.

Suddenly within a few weeks or months there is a huge credit card balance competing with the new mortgage payment and this is dangerous.

Large balances on credit cards can affect a consumer’s credit scores dramatically. In most scoring models, the debt consumers carry accounts for about a third of their credit scores, and one of the important factors evaluated is how close the balances on their revolving accounts (like credit cards) are to their credit limits. It’s known as “utilization.” Generally, the lower their debt in relation to their available credit, the better for their credit scores.

Most consumers will be fine if they keep balances below 20 percent to 25 percent of their available credit, although 10 percent or lower is ideal. (You can find out how your debt is affecting your credit scores with a free tool like’s Credit Report Card.)

The cure for old sofa syndrome

The cure for OSS? Take a deep breath, and wait. Figure out whether the purchase fits into your budget, and really think about what will happen once you replace that one item.

Harper says he and his counselors ask household members to “agree not to make any major purchases for at least six months so they can adjust to their new mortgage payment. This will help insure their long-term homeownership sustainability.”

What about times when you have to make a purchase you haven’t saved for; the washing machine or refrigerator goes, for example?

“If you do end up spending more than you anticipated, be sure you put a plan in place to pay down the balance,” Tom O’Donnell, senior vice president of Chase, says. He points out that Chase Blueprint offers a feature that helps cardholders save on credit card interest and pay down balances faster. Or you can use a credit card calculator to figure out how much you’ll have to pay each month to pay off your balance in a specific time frame.

I experienced this syndrome firsthand recently. I had to buy some dining room chairs to replace ones our foster kittens destroyed. Soon I found myself looking for an entire new dining room set. Fortunately, I didn’t find exactly what I was looking for, and eventually decided to stick with what I have.

But the replacement chairs I settled on will clash with the curtains, so those will have to go.

Hopefully I can stop there.

More on

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!


Read Next: 7 Ways to Save More at Big Lots

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,723 more deals!