If you ask most people what types of credit accounts can hurt your credit score, almost everyone will tell you that your credit cards have a huge impact. That is true – credit cards do impact credit scores (both negatively AND positively). Other accounts that impact your score that might typically come to mind are lines of credit, mortgages and car loans.
But you might not realize that there are other types of accounts that could impact your credit score, as well. Here are three of them, and the impact they can have on your credit:
Everyone has utility bills – power, water, phone, natural gas, etc. – but not everyone realizes that these bills can potentially impact your credit. Many utility companies report to the three major credit reporting agencies, but typically only after the accounts have gone delinquent –which means that these bills will impact your credit if you do not pay your bill in full and on time each month. These accounts don’t extend credit so their presence on your report won’t impact your debt utilization (your credit limits compared to how much of those limits that you are actually using). But they will report if you default on the account and don’t pay your bill, and that impacts your credit score. Additionally, some utility companies may perform a credit check on you before giving you service, and that can add to the number of inquiries made, which will also have an impact on your credit.
College can be pricey, so fortunately there are student loans available to help pay for college. But did you know that missing a student loan payment can potentially have a huge impact on your credit? Your student loans might not be considered as one loan on your credit report, even if you make a single payment each month to the servicer. Rather, they are reported by the disbursement you got each semester. So if you went to school for three years (six semesters) and took out student loans for each semester, you’re looking at six loans, not one loan! Any late or missed payments on your student loan will impact your credit score. So when you graduate from school and have to start paying your loans back, make sure that you make student loan repayment a priority!
Medical Bills Covered by Insurance
If you have medical insurance, you may sleep easier at night knowing that you won’t have to foot a huge bill if you require hospitalization. However, what many people don’t realize is that they may end up with a credit-impacting medical bill (even if they have insurance). This could happen for a number of reasons – from clerical errors to hospital bills that exceed coverage limits. So if you have medical coverage, be aware of what it covers and what it doesn’t cover, and be sure to follow-up diligently with the hospital to ensure that the bill is being covered by your insurance company.
Your credit score is based on information derived from many sources. Even if you think you know many of the main sources, make sure that you aren’t blindsided by these three credit-impacting accounts. This is also why it’s important to monitor your credit score regularly. Using a tool like Credit.com’s free Credit Report Card (to get your credit score every month along with a breakdown of the components of your credit score) can tip you off to problems with your accounts, so you can deal with the problems and work toward building stronger credit.