What do you know about your FICO and your credit score? It’s really what you don’t know that could hurt you in the long run.
A lot of people are unaware of even what their credit score is. Naturally, it’s not surprising that many people have no clue as to what could hurt their credit score. A good credit score helps you get lower interest rates and a higher approval threshold from lenders, whereas a bad one means rejections or more fees. The following four things could be damaging your score and you may not even know it.
Running A Credit Application
Whenever you run a credit application, the three major credit bureaus log what is called in inquiry. This in itself is not bad, it merely lets banks know that you were applying for credit. But it also detracts from your creditworthiness when you run it too often. If you wrack up too many inquiries over a certain amount of time, they can negatively affect your credit score because they will make it appear like you are desperate for credit. Furthermore, inquiries stay on your credit report, explains MyFico, for two years, but no longer can affect it after 12 months.
Closing Out An Old Card
If you close out an old card, beware. Bank Rate advises that you carefully scrutinize any cards that you plan on closing out first. Your credit report can be affected if the card is aged and you have a strong payment history. Or if you close it out with a large balance this can also look bad and can detract points or hamper your ability to get new credit.
Forgotten Fines and Overdue Bills
Some things may be hindering your credit that you are not even aware of, says Credit Karma. Things like doctor’s bills you never received that were later sent to collections but never collected on are very common. Simply disputing these or sending in the payment can help you immediately boost your score and can reverse the negative effect.
Using Your Debit Card To Rent A Car
You wouldn’t think it, but if you use your debit card to rent a car, the car rental service my actually run your credit, warns Investopedia. This can result in an added inquiry that hinders your credit rating. Instead, just use your credit card to rent that car and avoid having your credit run unnecessarily.