5 Weird Things That Can Impact Your Finances

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5 Weird Things That Can Impact Your Finances

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According to MSN Money we may be doing things that negatively affect our credit and finances, but not even know it.  I have to admit; I read the article and was shocked so I decided to share what I learned.

We've all heard the typical advice for keeping good credit:

  • Pay your bills on time
  • Don't open a bunch of credit cards at once
  • Don't file for bankruptcy

Those we've got in the bag. But there are a lot of lesser-known actions that can affect your financial situation, too. In fact, there are some that are just downright strange. And not knowing about them could get you into trouble, financially speaking.

So here's a rundown of the top five strange things that could damage your finances.

1. Common sense dictates that your credit scores will take a hit if you don't pay your bills. But what about getting a parking ticket?

So you forgot about that parking ticket you got while visiting your friend in the city - no big deal, right? Wrong. An unpaid parking ticket or even a library fine could eventually be turned over to a collections agency. Some cities - such as Chicago, Miami and New York - are turning unpaid parking tickets and library fines over to private collections agencies.

A collections account is a derogatory mark on your credit that can do significant damage to your credit score. If you know you have unpaid fines, pay them as soon as possible so you won't be surprised by a collections account down the road.

2. Ordering TV channels

So you just moved into a new place and can't wait to get your new cable hook-up? Be warned: Some high-speed Internet and cable companies will run a hard inquiry on your credit when you sign up for their service. A hard inquiry typically occurs when you apply for credit - like a credit card or home loan. Many hard inquiries at once can really ding your credit - unless they're a result of shopping for loan rates.

Fortunately, any company or business that performs a hard inquiry on your credit must first get your permission, so this shouldn't come as a surprise.

3. Using a debit card to rent a car

Most rental agencies require you pay your deposit with a credit card. However, some will agree to accept a debit card if you'll allow them to perform a credit check on you, which will result in a hard inquiry. Just like your cable company, rental agencies must get your permission in order to do this.

Some rental car companies are upfront about this practice. Thrifty, for instance, lists a credit check as one of the things to know about renting a car with a debit card. When you're choosing your rental car company, ask if they'll perform a credit check so that you'll be prepared if you plan to pay with your debit card.

4. Not using your credit cards

Carrying a lot of credit card debt is generally bad for your credit score. But not using your credit cards at all can also be detrimental. Some credit card issuers will mark your credit cards "inactive" after a certain period of time, and they may even close the credit card account.

When this happens, it will reduce your overall number of accounts and could also affect your credit utilization rate, which is the ratio of your total credit card balances to your total credit limits. Since your inactive card's credit limit will no longer factor into your overall utilization, that rate could be inflated. And, in general, the higher your credit utilization rate, the lower your score.

5. Financing the purchase of your new bedroom suite

You've probably seen the offers: "0 percent financing for the first 12 months on a new couch!" Sounds great - buy a couch now, pay much, much later. But this great deal is usually not-so-great for your credit. Here's why: A financing plan like this is usually considered a "last-resort" loan by creditors assessing your creditworthiness. You could look like a higher credit risk, just because you wanted a deal on a couch.

Your credit could also suffer from the addition of a high balance loan on your credit report. This goes back to your credit utilization rate - the furniture loan is essentially maxed out (since you haven't made a payment), which will increase your utilization rate

So, there you have it.   Use this knowledge to your advantage. 

 

Kimberly Johns, Debt Management Plan Customer with Leading Provider of Debt Relief, CareOne Services, Inc. Kimberly Johns

Kimberly is enrolled on the CareOne Debt Management Plan (DMP). Kimberly is very active in the Community Forums, some of you may recognize her Community user name; Tiquie. Recently retired, Kim shares how she and her husband manage the financial challenges of living on a fixed income in their home state of Illinois. The John's have found some really creative and fun ways to offset the limitations of a retirement income. Kimberly generously shares smart and tested tips in her A Straight Talk on Debt blog! Compensated Blogger for CareOne Debt Relief Services.

 

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  • Thanks for the info!

  • connorsp, thanks for taking the time to read my blog.  I was so surprised to find these 5 things could adversely affect my credit.  Good luck to you!

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