Several strategies raise a credit score, but in most cases, simply being on time with utility payments won't do the trick. Utilities like gas, electricity, and water are paid regularly but do not affect a person's credit score because the information is not reported to the credit bureaus. On the other hand, a person's credit score is mainly determined by their loan and credit card history, particularly their repayment history. Paying bills on time and keeping debt levels low are two essential aspects of determining a person's credit score, both of which are well known.

Here Are The 7 Things That Affect Your Credit Score That You Were Not Aware Of

Small Debts Not Paid

Many people are reliable in making payments on more enormous debts like their mortgage, credit card, and utility bills, but they often fail to do the same with their lesser loans. They might discount or overlook the debts since they don't see them as pressing. Sometimes, however, they won't. While some cities still send unpaid penalties to credit bureaus, this is much less common. It's essential to pay off all of your debts, no matter how small they may seem.

Utility Costs

Even while your utility payment is not a loan, it might affect your credit negatively if it goes unpaid. Suppose you have an overdue account with a utility company. In that case, you will be notified far sooner than other businesses you may deal with because they do not typically publish customers' payment histories.

Too Many Recent Requests For Loans

It can be tempting to sign up for new credit cards that provide an attractive benefit for your business. Applying for a credit card might net you tens of thousands of points or airline miles from some banks and discounts on other purchases. While it may not impact just one application, sending out too many too quickly will hurt your credit. If you are in the market for a home, automobile, or student loan, when a high credit score may be essential, you should apply for credit as little as possible in advance.

Searching For A Long-Term Loan

FICO would not punish consumers for making many inquiries into their credit history in a short period, allowing them to shop around for the best interest rates on mortgages, student loans, and vehicle loans. Inquiries within a short time frame, such as 14 or 45 days, are discounted by most FICO scoring models.

Credit Cards For A Business

Does your company use a credit card? If you are listed as the principal cardholder on the account, the bank will likely record your payment history and hold you personally liable for any charges made on the card. Business credit cards should be used as carefully as personal credit cards to avoid damaging your credit score through late payments or unpaid obligations.

Mistakes You Didn't Make

A lower credit score is an unintended consequence of inaccurate information on your credit report. People with famous names, for example, may discover that their file contains details about someone else. Sometimes negative information about your score results from clerical or typing errors. This is why consumers must check their credit reports at least once a year and challenge any discrepancies they discover. Using the official website, you can request a free credit report once per year from each of the three major credit bureaus.

Accounts Missing

Not always the items on your credit report that cause problems, but the ones that are missing. It's possible that some of your lenders won't report their interactions with you to the credit reporting companies. If, for example, a credit card with a spotless payment history is not included in your report while another card on which you have missed a payment or two is, the net result could be a lower credit score. Suppose you discover any such accounting entries have been redacted from your report. In that case, FICO suggests "asking your lenders to start reporting your credit card data to credit agencies" or "consider trying to shift your account to a different lender who does report regularly." If any of these are affecting your credit score, you may be able to have them removed from your credit reports by working with one of the best credit repair companies.

Conclusion

Since the leading credit reporting agencies do not include rent, phone, electric, and other utility accounts in their credit scoring models, making payments on time or being late has no impact on your credit score. But if you haven't paid your bills in a while and the service provider sends the debt to a collection agency, it could hurt your credit score. Your credit score may suffer if you have unpaid medical bills sent to collections. On the flip side, there are new ways in which a stellar payment history with such non-credit-related statements might raise your credit score.