6 Silly Ways to Wreck Your Credit Without Realizing It

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Seeing your credit score drop is rarely a laughing matter. A low credit score can prevent you from getting a decent loan, might keep you from landing a job and can even prevent you from renting a decent apartment.

So even though a tumbling credit score is deadly serious, the way you arrive at such a free fall can be downright silly. Following are six ways some careless behavior can cause your credit score to drop — even if you aren’t aware it’s happening.

Opening a credit account for the sign-up bonus

Credit card application
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Buy a sweater, and the clerk will offer a 15 percent discount if you sign up for a store credit card. Stroll through the airport, and an airline representative will pledge to give you 50,000 free miles in exchange for signature on a credit card application form.

That sign-up bonus may look great now, but the credit card company almost surely will do a “hard pull” on your credit report to check your creditworthiness. And when that happens, your credit score will dip.

Failing to pay your library fines

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Yes, that book is due back at the library. But you’re busy. You’ll do it tomorrow.

Let too many of those tomorrow’s pile up, though, and it could ding your credit score. As Money Talks News contributor Allison Martin reported in “11 Surprising Ways to Wreck Your Credit Score“:

My local library assesses a fee of 25 cents per day for each outstanding item. Once the account reaches $25, an additional fine of $7.95 is tacked on, and the entire account is forwarded to a collection agency.

Not bothering to pay taxes

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Do you burn with indignation every time you read how much the U.S. spends on defense? Does all that government spending on social programs send you into a tizzy?

Don’t use your righteous anger as an excuse to lodge a protest by stiffing Uncle Sam at tax time. As the good folks at TurboTax remind you, failing to pay a large tax bill could end up hurting your credit — and worse — if the IRS files a tax lien in court:

A tax lien can give the federal government a legal claim to every asset you own — including your home, your cars, or other property. And if it reduces your credit score, it can become more difficult for you to obtain credit in the future.

In 2017, the nation’s three largest credit-reporting agencies — Equifax, Experian and Transunion — began a policy removing many — but not all — tax lien and civil judgment data from consumers’ files.

So, you could technically try to hoodwink the government and see if you can get away with it. But it’s a strategy that Money Talks News does not advise.

Ignoring your utility bills

Cold young woman by electric heater
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Fail to pay your electricity or water bill, and you could find yourself being unable to power your toaster or to draw a warm bath.

Your credit score might take a hit, too. According to the Consumer Financial Protection Bureau:

Most utility companies don’t report to the big three consumer reporting agencies (CRAs) whether or how regularly you pay on time. However, if you fail to pay a bill and it is sent to a collection agency, that debt could show up on your credit reports from any of the big three CRAs.

Forgetting to cancel a gym membership

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The holidays are right around the corner. Millions of Americans who pack on the pounds during those year-end festivities will wake up in January with bulging waistline — and a newfound determination to join a gym and start exercising.

Alas, many of those folks will end up throwing in the towel on their fitness routine after a couple of months. But that doesn’t mean they can just forget about their gym membership obligations.

Fail to pay your obligation as stated in the gym contract, and the fitness club could send your account to a collections agency — which in turn could eventually result in a dent in your credit score.

Closing unused credit accounts

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Under the heading of “no good deed goes unpunished” is a decision to close a credit account that you no longer use. This sounds sensible, even downright responsible. Close the account, and you no longer can ring up debt with it.

However, closing a credit card account means the total amount of credit available to you will drop. And when that happens, your credit score will fall too, according to the CFPB.

Do you know of additional silly ways you can hurt your credit score? Share them in comments below or on our Facebook page.

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