Three Surprising Things That May Impact Your Score


You work hard to make sure your credit score remains high, right? Unfortunately, all your hard work could be hurt by seemingly small things that could have a big impact on your credit history. You might be surprised to find out that even a parking ticket could take your score down a few notches. By understanding what will and won't affect your credit score, you can help reduce problems that aren't conducive to a clean bill of credit.

Back Taxes

They say that the only thing you can count on in life is death and taxes. The IRS takes a hard line with back taxes and could even put a lien on your home or garnish your wages to get what they're due.

The good news is that owing the IRS money shouldn’t affect your credit score. In 2017, Equifax, Experian and TransUnion, the National Credit Reporting Agencies (NCRAs), announced and implemented enhanced standards for the collection and timely updating of public record data included in consumer credit reports as part of the National Consumer Assistance Plan (NCAP).

Upon implementing the NCAP enhanced standards for public records, the NCRAs removed all civil judgments and the majority of tax liens from their consumer credit reporting databases.

In 2018, the NCRAs, including TransUnion, decided to cease reporting tax lien data and to remove all remaining tax liens from our consumer credit reporting database in order to ensure compliance with the enhanced standards of the NCAP.

Unsettled Accounts

Changing service providers can be a pain, but in your rush to get it over with, don't forget to settle up your accounts. Some providers, be they gas, cable, electric, satellite or any number of other services, keep accounts on file when they aren't closed out properly. Make sure that when you make the switch, your account is caught up and you've requested the account be closed, otherwise the account might become inactive or delinquent.

Hard Inquiries

Most people know that excessive hard inquiries to check credit can negatively impact credit scores, but you might not even realize who runs a hard inquiry. Applying for a credit card, loan or mortgage will typically result in a hard inquiry. Make sure that they're only done when absolutely necessary to avoid dragging down your score.

Closed or Inactive Credit

It only makes sense: When you're done with a credit card, you close it out, right? Not necessarily. Closing an unused or inactive credit card could reflect as less available credit on your credit history, which is usually seen as a negative. Instead, keep unused credit cards open and use them for small purchases that you pay off immediately.

Take the next step toward financial health

What You Need to Know:

The credit scores provided are based on the VantageScore® 3.0 model. Lenders use a variety of credit scores and are likely to use a credit score different from VantageScore® 3.0 to assess your creditworthiness.

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