10 Surprising Ways to Negatively Affect Your Credit Score

By Miranda Marquit. Last updated 31 May 2016. 26 comments


A credit score is supposed to be about how you handle credit, so it seems counterintuitive that non-loan actions can bring your credit score down.

Unfortunately, the reality is that even if you aren’t borrowing money, you could still be hurting your credit score. Here are 10 actions that can bring down your score even though they have nothing to do with applying for or receiving credit. (See also: Surprising Things That Can Kill Your Credit)

1. Skip the Rent

Even though Experian recently started reporting on-time rent payments on consumers’ credit reports, you probably aren’t going to get credit score brownie points for paying the rent right when you should.

Don’t let that fool you into thinking that you can skip rent payments or pay your rent late on a regular basis without a negative impact on your score, though. If your landlord decides that he or she is sick of your slow payments, you can be reported to the credit bureaus.

On top of that, your landlord can ask a collection agency to attempt to collect on your delinquent payments. Once that happens, the credit bureaus find out and report it. Now your non-credit rent payment is dragging your credit score lower.

2. Failure to Pay Medical Bills

With the rising costs of health care, even those with health insurance can find themselves facing high medical bills. Don’t ignore these bills, though. Health care service providers can decide to report your unpaid bills to the credit bureaus or send your account to collection. Collection accounts look especially bad on a credit report.

Many hospitals and other health care providers are willing to work with you on large bills. If you can pay a large portion of the bill immediately, you might be able to get a discount on your health care. Or, if you can’t pay a large portion, you might be able to work out a payment plan. Realize, though, that you might be charged interest, or a fee, for a payment plan.

3. Ignore Library Fines

For many people, the idea that a $5 library fine could be harmful to their financial situation seems silly. However, not paying could cost you even more than what you owe. In order to collect more money and help ease strained local budgets, some libraries have been sending unpaid fines to collection agencies.

Once your library fines go to the collection agency, it appears on your credit report. On top of that, the collection agency might add its own fees to the fine. Your $5 library fine could easily balloon into a $20 or $30 cost — and bring down your credit rating on top of it all.

4. Rack Up the Back Taxes

Your unpaid back taxes aren’t just a matter between you and the government. If you end up racking up unpaid taxes, the government can place a lien against you. A tax lien is one of those public records items that appears on your credit report and can drag down your score.

A tax lien can be especially aggravating, since it will remain on your report for up to 15 years.

5. Miss Utility Payments (or Don't Completely Close Accounts)

Utility bills represent another of those non-credit payments you make regularly that aren’t likely to help your credit score. While there are alternative credit reporting agencies that you can ask to collect information on your utility payments, the credit scores that most financial services companies look at don’t include on-time utility payments.

However, like medical bills and rent payments, if you habitually pay late, or miss a payment altogether, the utility company can report your delinquency to the credit bureaus — and turn your account over to a collection agency.

This happened to me once. When I moved from New York, the final bill slipped through the cracks. I didn’t realize I wasn’t up to date on the account until I got a collection notice a year later and I doubled-checked my records. My credit score headed temporarily lower on the news.

Make sure you pay your utility bills on time. And, if you move, make sure you are completely settled with the company. Even an address forward might not be enough to catch all your final bills; 30 days after your move, call the utility companies and make sure everything is squared away.

6. Buy a New Cell Phone (or Sign Up for Utilities)

Increasingly, cell phone providers are checking your credit when you sign up for a contract. In some cases, the company performs a soft inquiry, and your score isn’t damaged. Other times, though, the provider runs a hard credit check. It looks as though you are applying for credit — even though you don’t think that you are.

These types of hard credit inquires can weigh on your credit score, pulling it down. A similar effect can be seen when you sign up for cable or satellite TV services, as well as for Internet service. When you sign up for a new telecommunications service and the company asks if they can run a credit check, ask if it’s possible for a soft inquiry instead of a hard inquiry.

7. Open a Bank Account

Not all financial institutions check your credit before you open an account, but some banks and credit unions do. Indeed, one of the reasons that your checking account might be denied is due to your credit report.

Once again, you need to find out whether the bank is performing a hard credit pull or a soft credit pull. A soft pull isn’t going to bring your score down, but if the bank performs a hard inquiry that looks like you are applying for credit (even though you are just trying to open a checking or savings account), it could ding your credit score.

8. Cancel Your Gym Membership Improperly

Many consumers choose to pay for a monthly gym membership automatically using an automatic withdrawal or putting the monthly fee on a credit card. This streamlines the process, but it can also cause problems down the road if you aren’t careful.

Gyms often have cancellation procedures that you are supposed to follow, usually involving paperwork. If you don’t fill out the paperwork to cancel, but contact the credit card or the bank to stop allowing the automatic payments, you could find yourself in trouble.

Your gym might report it as non-payment to the credit bureaus. Additionally, your account could be turned over to collections. Even if you don’t have an automatic payment arrangement, some gyms might take these actions if you don’t fill out the appropriate cancellation paperwork.

When you sign your gym membership agreement, make sure you understand what actions you need to take in order to cancel your gym membership — and find out what the gym will do if you don’t follow proper procedure.

9. Disregard Traffic Tickets

Are you a traffic scofflaw? If you have unpaid parking tickets or you ignore speeding tickets and other violations, your credit score could suffer. Not only will city and state governments add more penalties the longer you ignore your tickets, but they could decide to report them to the credit bureaus as debts. And, of course, there is always the risk that a collection agency will get involved.

Don’t think that a violation in another state can be safely ignored, either. Whenever a ticket is written out, your license plate number is recorded, and it is run. They know who you are, and they aren’t afraid to report you. It may take a little longer, but unpaid tickets will eventually catch up to you.

10. Close Unused Credit Accounts

When you aren’t using your credit accounts, it makes sense to close them, right? After all, it’s not like you are borrowing money with those accounts anymore. Unfortunately, closing those unused credit accounts can have a negative impact on your credit score.

First of all, those credit accounts are contributing to the amount of credit you have available. Because your credit utilization and available credit matters to your credit score, you want to show that you aren’t using up as much of credit as you could be. Once you close those unused accounts, you suddenly have less credit available. And, if you occasionally carry a balance on your other cards, your credit utilization has increased.

Next, you have to consider the length of your credit history. The older your credit accounts, the better it is for your credit score. Your credit accounts have an “average age,” and if you close your older accounts, you could find yourself with a shorter credit history. The result could mean a lower credit score.

Before you close an old, unused credit card, reconsider. Think about how long you’ve had the account, and how it has been helping your credit history length.

Most Financially Related Actions Affect Your Credit Score

Even when you aren’t borrowing money, your financial actions can impact your credit score. Missing a utility payment or skipping out on a library fine might seem like no big deal, but if you don’t take care of it, and let it sit, the end result can be a lower credit score.

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Guest's picture

Does the 30 day rule that applies to credit accounts apply to the other accounts mentioned in this article that could damage your score? Also if anyone was wondering what jurisdictions report tickets to credit agencies I know for a fact that DC does because it happened to me.

Guest's picture

Hi Greg,

Many accounts do not have the 30 day rule. Some accounts will not show up on a credit report unless they are sent to collections for not being paid for several months.

If someone is in a bind there are certain accounts that can be paid late if absolutely necessary. There will probably be a fee involved, but that's better than damaging credit scores.

Here's a few accounts that can be paid late and won't impact credit scores UNLESS the payments are not caught up. These are helpful for those months when funds are really tight:

• Cable Television bill
• Electricity
• Water bill
• Cell Phone
• Medical Bills
• Lawn service/pool service
• 401k loan
• Real estate taxes
• Payday loans

Hope this helps!

Guest's picture

This was a great article. Your number 10 which reads: “Unfortunately, closing those unused credit accounts can have a negative impact on your credit score”. I have a credit card that is fully paid and instead of getting rid of it I still have it, I just do not use it. I always thought that by cancelling your credit card you were better off and that it look better on your credit. Now in case of an emergency and I ever do need to use my credit card I will have it.

Guest's picture

Make sure you use it occasionally, or the credit card issuer may cancel it due to inactivity. It happened to me three times in a year, before I realized what was happening.The

Guest's picture

Our electric company account actually shows up on our credit report when we do our every four month checkup available through the free reporting site. So, yeah, you definitely don't want to miss that one :)

Guest's picture

This is a major point that _many_ consumers miss. Utility bills are really important! They can help you credit in some cases, and it frequently can drag you down. Also, you might find it difficult to sign up for new utilities when you move if you've missed payments in the past. In those cases, you'll sometimes be forced to put up a deposit (as much as several hundred dollars!) in order to get service started. Definitely stay on top of your utility bills! We built an entire product around helping consumers remember to pay on time and making it easy for them to do so. Even if you don't use that, at least set calendar reminders or something to trigger your memory every month. Due dates sometimes creep around (every four weeks is different than day X of every month), so watch that as well.

Guest's picture

This is interesting. I didn't realize that improperly closing your gym membership - I simply thought if you stopped paying, you just couldn't use their services anymore. Duly noted. Also, traffic tickets?? Ignoring them in the first place would be enough hassle - I guess that's just another incentive to drive safely! Thanks Miranda.

Guest's picture

I've got a bunch of unused credit cards that I never bothered to close, so I guess I have been unwittingly improving my credit score for many years now. :) That's good to know.

Guest's picture
Sydney Richardson

Thanks for these handy tips... i for one definitely wouldn't cancel my gym membership properly. I would probably just walk in throw the card at them and demand my money back.!!!

Guest's picture

Another one I hadn't though of was a loan being transferred.
My student loans through the governement were recently transfered over to a company to manage. I received a letter that this was going to happen and when I checked my credit score after the transfer it had gone down because it showed that two accounts were closed and two were opened.
With how often this happens I imagine it's affecting a huge number of people's credit scores and they have no control over it!

Guest's picture

If someone has unused credit card accounts it is a good idea to pull the card out of your wallet and make a small purchase now and then.

Banks don't always like carrying dormant accounts. It costs money to maintain the account, and without some level of usage it is hard for them to assess your behavior, or generate any revenues to offset costs.

One possible consequence is that the bank may close the account. The impact to your score would be as described in the article. This happened to me during the credit crisis: one dormant account was closed, and two others had limits reduced. These actions were taken by the bank, not me.

Guest's picture
David @ Bankruptcy Canada

Thanks for sharing this info. Disregarding traffic tickets can be negatively affect your credit score - and not a lot of people know this.

I would suggest that if you are planning to buy a television set or refrigerator, do on installment rather than paying cash. It is another opportunity to show you can make payments when they are due.

Guest's picture

There are some surprising items on this list. Who knew not paying for your overdue library book or not canceling your gym membership could affect your credit score?

I'll also have to think twice about medical bills. I usually wait until the third notice to pay the bill (90 days) since they never charge interest on the charge. I've never had it show up on my credit report. I wonder how long it has to go unpaid until it shows up?

Guest's picture

When it is sent to collections

Guest's picture
Sam d

I guess these types of things would have to be common sense to most people.

By the sounds of it, we have a different system here in Australia

Guest's picture
Joshua P

Wow I never realized getting a new cellphone would lower my credit, but they do check the credit so i guess it makes sense.

Guest's picture

I am amazed that people still use libraries - takes me back to when I was a kid. But really glad that they are still there as I worked for a cultural organization and all they did was close their libraries!

Guest's picture

Skip Rent - as a landlord, that comment make me sick. Really sad - and your site was recommended - not any longer.

Amy Lu's picture
Amy Lu

Hi Guest! Actually, skipping rent isn't recommended here. It's listed as something that can damage your credit score.

Guest's picture

It would be a really good idea to READ the article before making unintelligent comments.

Guest's picture

Skip the rent is followed by reasons why you should NOT skip the rent, and you somehow are still indignant?

Guest's picture

I have around 6000 dollars in dispute with a payroll company for my corporation. Can they place it on my personal credit report.

Guest's picture

What if two of your cards are oldest and unused for over a year (low credit balance), yet you still need to pay the membership fee? Would you cancel it since you're paying for a card you don't use knowing it can possibly hurt your score?

Guest's picture
247 Bankruptcy

This is the reason why it is important to pay bills as early as possible to avoid such negative effect on the credit score. Thanks for the post!

Guest's picture
Stacy Lovell

I have 2 unpaid Medical bills cuz i was in an accident last year and was only in the er for a few minutes. I was wondering will this prevent me from getting a new apartment? Or do I need to make payment arrangements?

Guest's picture

Why is it "surprising" that not paying your bills can lower your credit score? That's the definition of a credit score. Cut the clickbait BS.