You make your car payment, mortgage/rent payment, credit card payments on time every time. You have a great career, amazing benefits, and no reason to think your Credit Score could have been decimated by one of these six Credit Killers that have taken our clients by surprise in the past.
We understand that just because you have one of these Credit Killers on your report does not mean you didn’t hold up to your end of the bargain. Circumstances in life can be challenging and making sure every account is properly closed is not always feasible. The same goes with the reporting company, they also make mistakes. We can sort through the mess with you.
One major theme that we hear when we discuss scores that have been affected by one of the following plagues is something along the lines of, “But when I bought my car/boat/RV they didn’t say anything about this.”
Same credit report, right? Absolutely, they were just pulled at a different time. The car payments, mortgages, credit cards all still show up and act as a positive for the report. The difference is that typically one of these six Credit Killers has reported since the last time a credit request was made.
#1 – Unpaid Speeding, Parking, or Traffic Tickets
Yep. They can report to the credit bureaus, too. On top of the legal and court costs, they can even tack on the administrative fees to have it reported to the credit agencies. This can make a simple ticket turn into a nightmare for your bank account and lending opportunities.
Beware of the traffic light ticket! We have seen this go different ways and are giving you the advice that if one does show up in your mailbox, pay it. Why risk precious credit points over $50? When it comes to getting the right rate on the perfect home, wouldn’t you pay $50 to get a better one? Also make sure to pay any out of state tickets! The myths and legends surrounding who can report what are all very outdated.
#2 – That Brand New Cell Phone
It starts with a hard inquiry and then can become a negative account on your credit history. That does not mean that they report positively for you, though. Cell phone companies typically only report to the agencies if you are delinquent or if you cancel outside of your service contract without paying the enormous fee that you agreed to pay. Whenever you are providing your social for any type of service; internet, cable, or utility company always feel comfortable asking why they need it and what they use it for. Ask about the difference between a “hard” and a “soft” credit pull. Hard credit pulls will stay on your report for 2 years – if you get enough of them they bring your score down. Soft credit pulls typically roll off after a few weeks at the latest, but either way they pull it, they have your social and can report to the Credit Agencies.
#3 – Overdue Library Books
We have seen it with our own eyes, this one catches everyone off guard. No one seems to recall when they checked out at the library the last time or what book they may have not returned, but everyone has to pay the piper. Proving you didn’t check out a book in 1994 is going to be tough and paying the fee is the fastest way to settle up. A phone call to inquire about the situation won’t hurt, but expect to be frustrated.
#4 – Erroneously Cancelled Gym Memberships
Remember two January’s ago? You made that promise to go to the gym every week at least four times a week? Unfortunately, that promise was probably made in writing if this Credit Killer is showing up on your report. Maybe the promise wasn’t the same one you made to yourself, but you probably signed a contract that said you would at least pay for that gym membership for the next several years. Cancellation terms vary from gym to gym, but we’ve seen many scenarios that allow for an early termination.
Cancellation Clauses We’ve Seen
- Move 20+ miles away from any gym location
- Cancel in person at your home gym
- Provide 60 days written notice
- Maintain your membership for a minimum amount of time before cancelling
- Medical documentation that you can not use any equipment at the facility
Although at the time these conditions were not an issue, when it comes to checking your credit they can really cause some headache.
#5 – Student Loan Payment Missed
School loans are the fantastic loans that our parents “sign us up for” when we are 17 years old and they start haunting us at 25 years old! Some student loans are private and some are government. We see student loans report in several different statuses.
Student Loan Statuses On Credit Reports
- In Deferment – When you remain in school, most companies will keep you in a deferred status, until a certain amount of months after graduation.
- In Full, Fixed Repayment – We see this when you are at a point where you have to repay the loan and your income will allow this to happen. They will set a ‘fixed’ payment for the life of the loan and give you a projected end date.
- In Forbearance – This occurs when you need to TEMPORARILY suspend your student loan payment. This may be the result of a hardship or other reason to suspend or even lessen the payments for a set time period.
- In Income-Based Repayment – When you are at a point where you your loans come back into repayment status and you submit financials to the student loan company and they will give you an income-based payment. They will reevaluate this every few years, as your income increases. We have seen as little as $0 per month before.
#6 – Missed Utility Payments
This one comes as less of a shocker to most people, but some clients have been shocked that a payment was missed. We see this a lot when people are moving from one utility provider to another. There could always be a small balance or pro-rated “last month” payment remaining that lingers around for a while and shows up on your credit report. Most of the time these are small balances, but can have big consequences.
Ultimately it comes down to this – if a company asks for your social security number they more than likely are going to do two things with it. First, they’ll check your credit to make sure you can pay what you’re promising to pay. Second, they’ll report to the credit bureaus if you don’t pay what you’re promising to pay.
WE CAN HELP!
Let us check what is on there. If a company has reported a balance you don’t owe, we know the steps to take so that you aren’t held liable.
If you do owe exactly what they are saying you owe, we can help with that too. Setting up a plan, making a few payments, and continuing to follow up with them as future circumstances present themselves is what any collections company is really after. They are in the business of reconciling accounts, we are in the business of reconciling families that deserve a home that they deserve. Don’t let one of these 6 decimate your report, but what if they already have? We’ll help you get through it together.