10 Surprising Things That Hurt Your Credit Score

1. Getting a new cell phone contract


Getting a new cell phone can initiate a hard credit inquiry when you open a new mobile account. Typically this inquiry doesn't lower your score significantly, but if you have several hard credit inquiries placed at one time, the damage can pile up.

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2. Requesting a credit limit increase

Graph With Stacks Of Coins

This is another activity that can trigger a credit inquiry. To avoid short-term damage, when calling to request the increase, ask your institution if their protocol is to initiate a hard inquiry on your credit report.

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3. Disputing a credit card bill or account


Though disputing errors on your credit report (such as an erroneous late payment, or having wrong accounts materialize) is encouraged, if a credit check is done during that time, many credit-scoring companies do not include the disputed credit line when calculating your score, meaning it could worsen your credit utilization rate.

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4. Having outstanding library fines


Cities and municipalities need their money back, and what better way to make that point stick than sending minor infractions and outstanding fines to a collection agency?

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5. Having unpaid parking tickets


Parking tickets are just another category of fines increasingly being sent to collection agencies. New York City, which had close to $700 million in overdue parking fines in 2011, is one city that sending fines in pursuit of closing budget gaps.

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6. Closing an old credit card account


Closing an old account can injure your credit utilization percentage. When the card is closed, you lose the value of the unused credit limit on that card. If the debt you carry on your remaining cards is heavy, the impact will be more substantial, or if the line of credit was high. However, if the line of credit was low and your debt is low, you have nothing to worry about.

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7. Using a business credit card


Major credit card issuers require that business professionals co-sign with their company when they apply for business cards now. If the company defaults on payment, your credit will be hit. Additionally, if your business card appears on your credit report, large credit balances can lower your FICO scores.

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8. Not using your credit cards


Your inactive credit cards cost banks maintenance fees that aren't justified by your credit card use. Since you're not swiping those cards, the bank isn't making revenue through swipe fees when you shop. Eventually, the card issuer will close your inactive account, and the same thing that happens when you close your account is what will take place.

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9. Paying off old debts


When you pay off an old debt from the past, there is short-term damage to your credit report. The debt can reappear on your report; the payment status can be listed in a bad light, which could trigger a drop in your score. Payment on that debt may reactivate the legal statue of limitations on that obligation.

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10. Canceling your gym membership hastily


If you pay a monthly gym membership fee, you might pay using automatic withdrawal. However, if you fail to follow cancellation procedures including paperwork, and just have your bank stop allowing the payments, your gym can do a number of things, such as reporting your membership as non-payment to the credit bureaus and turning the account over to collection agencies.

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