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Little-Known Factors That Negatively Affect Your Credit Score

Little-Known Factors That Negatively Affect Your Credit Score

Unless you’re brand new to credit, you probably know the basic things that can negatively affect your credit score: missed payments, credit report errors, maxed-out credit cards, bankruptcy, etc.

All these factors are pretty serious, and may require some outside help in the case of credit repair errors. However, there are a few lesser-known factors you should know about that can also lower your score.

Missed Rent Payments

If you thought your rent payments were free from the credit bureaus, think again. Missed rent payments are routinely reported to the credit bureaus, resulting in a lower credit score.

Thankfully, with the help of companies like RentBureau, ClearNow, and RentTrack, positive rent histories can actually help raise your credit score. So if you’re looking to improve your score, maintaining a good rental history can give you a good boost.

Missing Accounts

If you have positive accounts that are missing from your credit report, then you’re missing out on their potential to improve your score. Fixing this problem is fairly simple, just follow these steps:

  1. Get a copy of your credit report
  2. Make a list of any accounts that you make monthly payments on (including things like cable, internet, utilities, etc.)
  3. See if any are missing from your credit report (which is likely)
  4. Contact the companies where you keep the missing accounts and ask them if they will report your positive history to the credit bureaus

You may be surprised that many of these companies will be more than willing to help you out. The extra positive credit history these accounts provide are sure to be a boon to your credit score.

Paying on the ‘Due Date’ instead of the ‘Report Date’

It’s extremely important to pay your bills before the due date, but it’s even better to pay them on the “report date.” This is the date that the credit card company will report information, including your current balance, to the credit bureaus. If you’re carrying a balance, but you’re planning on paying it all off on the due date, then it’s possible that the balance will show up on your credit report even though it was paid off on time.

To remedy this problem, simply ask your credit card company what their “report date” is, and pay by that date rather than the regular due date.

A Poor Credit ‘Mix’Credit Mix

There are so many things that factor into your credit score, all calculated by computers in some vast back room filled with servers. Your credit score is more of a snap shot; it’s supposed to paint a picture of your credit worthiness using only 3 digits. To truly build great credit, you need to gave a good “mix” of credit. If you have a poor mix (for example, only credit card accounts and no installment loans), then you’re viewed as a risky investment by the credit bureaus. On the other hand, if you use a wide variety of credit, and you are very responsible across the board, then you’re going to have a very high score.

Not Using Your Credit Regularly

While refraining from using your credit cards might be financially responsible, it doesn’t do too many favors for your credit score. Without recent, regular credit history on your credit report, your score can begin to drop.

To keep your credit score looking good, use one or two credit cards regularly, but be sure to pay them off each month.

Has your credit score been affected by any of these little-known factors? Let us know in the comments below.

photo credit: Ignas Kukenys via photopin cc
photo credit: Johnnie Walker 91 via photopin cc

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