You do a lot to make sure your credit is in decent shape. More often than not, you’re paying your bills on time and you do your best to keep your debt utilization ratio where it should be (experts recommend keeping your debts at 30%, ideally 10%, of your total credit limit). So, when you check your credit scores — you can see two of them for free on Credit.com — you usually see the positive results.
But what about the time you slipped up and forgot to pay a few bills? Or moved without giving your roommate that last rent check? These things may not be showing up in your credit history, but they could be damaging the credit of others. Here are six things you could be doing that could destroy someone else’s credit, whether you realize it or not.
1. Not Paying on a Co-Signed Loan
You know that shiny set of new wheels you got when you graduated, thanks to Mom or Dad co-signing an auto loan with you? When they put their name on the dotted line, they guaranteed they’d pay the debt if you didn’t, even though it was deemed your responsibility.
If you were late on a payment for a co-signed loan, even if you eventually sent in the check, that has consequences for the co-signer. If the loan was ultimately written off, that means your co-signer took even more of a hit. If you’re going to be late, or can’t make your car payments, it’s a good idea to talk with your co-signer to see if they can cover you so you don’t get hit with late fees and they avoid seeing any damage to their credit. And you certainly don’t want to skip out on paying altogether.
2. Racking Up Debt as an Authorized User on a Credit Card
“Having an authorized user is a risk that can backfire if they run the charges over the assigned limit or run up an unmanageable balance, leaving the primary cardholder to deal with the consequences that include a damaged credit rating,” according to an email from Bruce McClary, vice president of communications for the National Foundation for Credit Counseling.
Authorized users aren’t held accountable for paying the balance the same way the primary user is — and that spending is also reflected on the primary account holders’ credit. So, if you’re racking up charges, it’s affecting their debt-to-credit ratio, which makes up 30% of their credit score. It’s a good idea to talk about expectations for spending and repayment before becoming an authorized user, but if you already are one, it doesn’t hurt to have that conversation now.
3. Not Paying Your Portion of the Rent
If your name wasn’t on the lease, you may not have heard about that last rent check never making it to the landlord. Or you may not have given the money to your former roommate before you headed out of town. No matter what the situation, not paying your portion of the rent could be damaging for the person whose name was on the lease. Your former landlord could notify a consumer reporting company, like RentBureau, about the missed payment or could even go directly to the credit bureaus, which could ding the lease holders’ credit.
4. Returning Library Books Late (or Not at All)
Doing this on your own card can be damaging, as the late fees can potentially send your account to collections. But doing this on someone else’s library card can have the same effect, only that would lead to a debt collector knocking on the library card owner’s door (figuratively speaking). If you borrow someone’s library card, all you have to do is make sure you’re fair and return the items you borrow by the due date. And, if you just couldn’t finish reading that book in time, go in and pay the fine — it’s usually just a few cents each day you’re late.
5. Bailing on Shared Debts After a Breakup
If you’ve been sharing the responsibility of paying a loan — whether for a mortgage, car, student loan or something else — and then something ends the relationship, that won’t end the debt. Same goes for shared credit card accounts, but if only one of your names is on the account, despite who you’ve deemed in charge of paying. Communication is key here. You don’t want to wait until a past-due notice shows up in the mail, alerting your ex that you aren’t paying their debt and have harmed their credit in the process.
6. Getting a Ticket in Someone Else’s Car
Whether you get a ticket for speeding, a parking violation, running a red light or something else, it’s your mistake. However, if you do this in someone else’s car and don’t pay the ticket, your mistake will cause the car owner’s credit to suffer, not yours. The debt may not even be on the car owner’s radar until it reaches collections or receives a judgment. As if that isn’t bad enough, the owner of the vehicle could see their car insurance rate skyrocket because of all this, too.