Remember those library books you keep meaning to bring back? Well, they may be costing you, and not just the small fine the library charges. In fact, they may be costing you a shot at a new car, your own house or even some job opportunities. Those overdue library books just may hit you where it hurts — in your credit score.
Our credit score is more than a joke in commercials with guitar-toting pirates singing about your free credit report. Your credit score is like your permanent record, and in many ways, is more important than any grade you received while in school. After all, those three little digits are the key to getting some of the things we really want out of life — like a car loan, a cell phone, an apartment or even a good rate on insurance.
We all know we can hurt our credit score by defaulting on a loan, declaring bankruptcy or not paying our credit card bills. But what about those library books? Here’s the scoop, along with some other surprising ways you can sabotage your credit score:
Overdue Library Books
Any type of late payment can result in a hit on your credit score. Though the library itself may not penalize you, overdue notices that go overlooked may result in the fine being sent to a collection agency, which will notify the credit bureaus. If this happens, that book you forgot about may end up on your credit report for seven years.
Closing an Account
Paying off an account and closing it is a good thing, right? Not exactly. Even if you have paid off your credit card, closing the account can harm your credit score. When you close an account, your overall credit utilization will go down, meaning you want to keep that card open with a very minimal balance.
Ignoring Traffic Tickets
Ignoring traffic tickets won’t make them go away. The city or county that issued your ticket can submit it to a collections agency or one of the three main credit bureaus. Once that happens, your credit score can take a dive.
Buying a New Cell Phone Plan
Many major carriers check your credit before handing over a new phone — and for every credit check, a hard inquiry is placed on your file that lowers your credit score. The same goes for every credit card you apply for, even if you don’t use it or get denied.
Carrying a Zero Credit Card Balance
Surprise! Having nothing at all on an opened credit card may be more harmful to your score than having a high balance. The best strategy for building credit is to make a small purchase each month and carry it into the next cycle to pay it off.
Reneging on a Gym Membership
If you forget your resolutions by February, you better not sign a contract. Most major gyms report missed payments to the major credit bureaus.
One safe resolution is to vow to monitor your credit report at least once a year. You have the right to contact each of the big three, Equifax, Experian and TransUnion, annually to request a copy of your report — and check out what’s influencing your score.