Credit Card Application Troubles? Some Quick Insight on Other Items That Can Affect Your Credit Score

Credit-CardsWhile most people know that having credit card debt and not paying off your cards in a timely manner can lead to a lower credit score, many don’t realize that there are a host of other things that can have a negative impact on your credit score. Whether you currently have credit card debt and are wondering how to alleviate it or you’re curious about other ways you might be negatively impacting your score, here are some factors that can lower your credit.

Unresolved Parking Tickets

If you’re one of those people who holds on to your parking tickets and forgets about them, leaving them to be discovered in the glove compartment later, you may actually be experiencing issues with your credit rating as a direct result. While it wasn’t always the case, unpaid parking tickets are now commonly being handed in to collection agencies so that the parking companies can receive the payments that are owed to them. If you’ve been taking old unpaid parking tickets for granted, it might also be important for you to know that even if you haven’t paid an out-of-state parking ticket, it can negatively impact your credit score.

Requesting a Credit Limit Increase

If you have a high amount of debt on your credit card and you’ve requested a credit card limit increase, this can actually be good in the long run since you won’t necessarily have a debt that goes above your limit. However, in the event that you request an increase simply because you’re thinking you may need one, a hard credit inquiry may be required before approval and this will automatically lower your credit score. If you think that a credit card limit increase is something that you require, you may want to check with your credit company to see if requesting an increase will require a hard inquiry or soft inquiry. While a soft inquiry will not alter your credit score, a hard inquiry will remain on your report for two years.

Applying for an Account at a Financial Institution

If you’ve recently switched to a credit union or other financial institution because of better customer care or improved interest rates, the process of setting up an account at another institution can be damaging to your credit score. As an institution that is making a commitment to take charge of your finances will want to know about your assets and your credit, they will not even consider going forward with you as their client unless they have done a hard inquiry to verify the stability, or lack thereof, of your financial situation. More damaging than a soft inquiry, switching financial institutions can have a more long-term and negative impact on your credit.

Renting an Automobile

One of the first things you might do if you have good credit or even some extra money is go on a vacation, and as many vacations require an alternate mode of transportation, you might find yourself in need of a car rental. As many rental vehicle companies want you to pay your deposit with a credit card, there may be a clause in the rental contract in regards to pulling your credit card report. Unfortunately, using your debit card on a deposit for a car may not even get you out of this as the clause in the contract can mean they will check up on your credit history anyway and this may lower your credit.

Letting Your Credit Card Use Lapse

If you’re in debt or you don’t want to spend a lot of money, you might think the best possible option is to avoid using your credit cards altogether so that there is no way you can incur late fees and interest. However, if you use your credit card infrequently at best, this means that your account may be closed due to inactivity and this will not read positively for your credit history. As well, if you’re not using your credit card and are therefore not required to pay the bill for it on time, this means that the bank or any future potential loaners have no way of knowing if you will pay your bills on time when there actually is money to be owed.

Using a Business Credit Card

In previous years, one of the benefits of a business credit card was not necessarily being responsible for paying it since all the associated expenses would be paid off and covered by the company. Unfortunately, nowadays if you are co-signed on the card with your company, the business card and any late payments will actually be linked to you and this information will show up on your credit card report. While this problem can be alleviated ahead of time if you find out if you’re expected to provide a personal guarantee, you may just want to opt out anyway and put the amount on your own credit card so you can monitor the payments on your own.

If you’re a consistent credit card user, it can be important to be aware of all of the little things you might not even know about that can impact your credit score. While making your payments on time will keep the creditors at bay, there are other things you should consider that could negatively impact your credit. Anything from unresolved parking tickets to use of a business credit card can have a big impact on your personal credit score, so make sure you resolve any issues before they get out of hand.