If you know the importance of your credit score, you can skip ahead to see what little-known things will hurt it. However, if you’re an adult and don’t know much your credit or why it is important to have a good credit score, we’re going to quickly break it down for you.
A credit score provides an easy way for lenders and banks to numerically judge your credit at a point in time. It gauges how likely you are to repay your loan in a timely manner. The better your history appears, the more attractive you become as a loan customer. Even if you’re not planning on taking out a loan, it’s smart to plan ahead. You never know when you may need a new car or want to put a down-payment on a house.
Now-a-days, there are plenty of websites where can you check your credit report for free (i.e. Credit Karma), so don’t dish out the $20 a month many places will charge you. Once you have checked your free credit report, you’ll get number that represents how good your score is. Most credit scores – including the FICO score and the latest version of the VantageScore – operate within the range of 301 to 850. Within that range, there are different categories, from bad to excellent:
- Excellent Credit: 781 – 850
- Good Credit: 661-780
- Fair Credit: 601-660
- Poor Credit: 501-600
- Bad Credit: below 500
Now that you know the basics of understanding your credit report, it’s good to know what can affect it. You’ll be very surprised to see what little-known things can drastically hurt your credit score:
Overdue Library Books
Do you have a book that you checked out from the library months ago, never got around to reading it, and not it’s just sitting on your shelf? Get that book back to the library as soon as possible. Sure -25 cents a day doesn’t sound like a lot to worry about. That’s just a small fee, right? Think again! In this era of tight budgets and cuts in public funding, libraries are increasingly turning over their overdue accounts to collection agencies. These agencies treat them like debt to be collected and report to the credit bureaus.