As you go about your daily life, you probably don’t spare much thought for how your actions impact your credit report. Sometimes, it’s not until you apply for a mortgage or loan do you come to realize just how much your actions may have affected it. Knowledge is power, so the more you know about your credit score, the better equipped you are to keep your score as high as possible.
1. Getting a Divorce
No one is saying that you shouldn’t divorce your significant other if that’s the best option for you, but it’s worth knowing that it can hurt your credit score. You may have spent years building up your credit score, only for it to be impacted through the loss of half your assets. When the time comes to sign on the dotted line, make sure both parties know who pays for anything you have co-signed. Fortunately, after the divorce is finalized, you can work on increasing your credit score through options like authorized user tradelines.
2. Not Paying Your Traffic Tickets
Very few things dampen your day as quickly as a traffic ticket. You may not have been aware that you broke the law, or you stand by your opinion that you were in the right. Regardless of how you feel about your traffic ticket, it’s in your credit score’s best interest to pay it. Unpaid traffic tickets are sometimes reported to credit bureaus, which could ultimately end up affecting your score.
3. Having No Savings
Over 70% of Americans have less than $1,000 saved for a rainy day. While that’s not a problem in itself, it can be if you receive a significant bill you can’t cover or lose your income. Without an emergency nest egg, you may find yourself making use of credit cards or loans, of which you might struggle to meet the repayments. These non-payments can form part of your credit score.
4. Ignoring Library Fees
A $3 fine from your local library may not seem like a big deal. Fortunately, many libraries will see it that way, as well. However, libraries under immense financial pressure have been known to send people to collection agencies who haven’t paid their library fees. All of a sudden, that insignificant late book fee can become a black mark against your name.
5. Not Paying Your Taxes
You have a responsibility to your country to pay your taxes. However, some people either avoid paying their taxes or don’t pay the right amount. If the Internal Revenue Service (IRS) ends up filing a Notice of Federal Tax Lien, it will appear on your public record, and may also show up on your credit report, where it can stay for up to 15 years. Fortunately, there are several things you can do throughout that period to lessen its impact, such as AU tradelines and making sound financial decisions.
6. Not Paying Your Medical Bills
Healthcare can cost a fortune in the United States if you don’t have insurance. Even if you don’t have thousands of dollars to cover your bill upfront, it’s essential not to ignore it. Failure to pay can end up affecting your credit score.
Before you reach for your credit card, make sure you also have the means to pay this off. One of the best options for paying off a medical bill is setting up a regular payment. As long as you are paying something off each week, you may be able to keep your credit score intact.
As much as we don’t like paying bills and fees, they are a necessary part of life. Failure to pay them can cause your credit score to plummet. Keep this in mind the next time you go to stash away that traffic ticket with no intention of paying it.