As you start becoming more financially independent and responsible you may find yourself looking at your credit score and wondering, how it got this way and how you can help to improve it possibly. No matter where your credit score is at, you definitely want to keep it from being affected negatively. With that being said you would most likely be surprised at what can affect your credit score, no matter how small or innocuous it may seem. There are really some unusual things that credit companies can get notified about or care about when it comes your personal credit.
Collection agencies are something that most of us who think they are financially responsible never really think about. We see them as something that only those who aren’t keeping up with their bills really ever need to worry about. However, payment disputes and even small fines that you have forgotten about can end up going to collection agencies who in turn end up reporting your misconduct to those who give you your credit score. There have even been stories of things like an old library fee getting sent to collections and affecting your credit score. While you may think that $5.00 fee in your hometown might be nothing, it can actually hurt you by becoming an uncollected debt down the line. This is an extreme case, but nonetheless it is all the more reason to check out your credit score from time to time.
One thing that you might not expect to affect your credit is when someone looks at your credit. However, this does not mean that you can’t look at your credit score to figure out if you’re in trouble before you try and get approved for something. What this means though is that when others check your credit score in order to approve you or deny you for a loan, credit card or something like that, your score may take a small dip. In order to keep this from really affecting you it is best to hold off on making these types of inquiries before a big loan or something. Wait to get that newest credit card until well after your mortgage is approved. It may only be a few points here or there, but it can make a difference, especially in the long term.
Another newer way that companies are using your credit score is by making a hard inquiry before approving you for some telecom contracts. When you sign up for a new internet or wireless plan it is possible that they looked to make sure that you are someone who pays their bills on time. When companies give out new equipment or phones at extremely discounted prices it is often in reality a small loan that is worked into the contract. This can have you unknowingly giving them a reason to check your credit.
While credit scores are being used differently now than years ago, it is easier than ever to check your credit score. You can even do it on your phone while waiting in line for a coffee if you’d like. Many mobile banking apps even have a credit checking option. The trick is to check your credit every so often, and definitely before any big needs for your credit score.