5 Financial Mistakes That Won't Hurt Your Credit Score

By Dan Rafter on 23 March 2017 0 comments

Certain financial mishaps can cost you dearly when it comes to your FICO credit score. Pay your credit card bill more than 30 days late, and your score can drop by 100 points. Declare bankruptcy or lose a home to foreclosure? Your score will fall by even more.

In general, lenders today consider a FICO credit score of 740 or higher to be a very good score. They consider anything over 800 to be excellent. Keeping your score in these ranges requires that you pay your bills on time each month and keep your credit card debt low.

But here's a secret about FICO scores: They don't measure all of your financial activity. It's possible to suffer a few financial setbacks, or make some money mistakes, without seeing your credit score take a dive.

Here are five financial mishaps that, though they might cause problems in your daily life, won't hurt your credit score.

1. Paying your credit card bill just a little late

You should always pay your credit card bills on time. And ideally, you should pay off your cards in full each month. But if you miss your deadline by two days or three weeks, it won't impact your credit score.

Your credit card provider will only report a payment as late to the three national credit bureaus — Experian, Equifax, and TransUnion — if you are at least 30 days late on it. As long as you pay before that 30-day deadline passes, your credit score will remain intact. (See also: How Late Payments Affect Your Credit)

Of course, this doesn't mean that you won't take a financial hit. Your credit card provider could raise your card's interest rate and levy a late fee — usually around $35 — against you.

2. Forgetting to pay your doctor's bill

Not all bills are equal in the eyes of your credit score. Pay your credit card or mortgage payment more than 30 days late, and you can expect your FICO score to plunge. Do the same with your doctor's or dentist's bill, and your credit score won't budge.

That's because medical providers don't report late payments to the credit bureaus. So paying your dentist bill 40 days late won't hurt your credit score.

Again, though, you need to be careful. Paying your medical bills late could have other financial consequences. Your medical provider might tack on additional fees to your bill if you don't pay on time. And if you put off paying that bill for too long, your medical provider might send a collections agency after you. This will be reported to the credit bureaus, and it will cause your credit score to fall.

3. Not paying your phone or utility bill on time

Your phone, electrical, gas, water, garbage, and cable bills are much like your medical ones: The providers of these services don't report to the credit bureaus. You can pay these bills late without suffering a hit to your credit score.

Again, be careful. You don't want your utility company shutting off your service or sending your late bill into collections, something that will hurt your credit score.

4. Paying your apartment rent late (usually)

It used to be that apartment rent payments were never reported to the credit bureaus. Today, that is slowly beginning to change, with some services popping up that will report on-time, and late, rental payments to credit bureaus.

But the majority of renters still don't see their monthly rent payments reported to the credit bureaus. That's bad news for renters who pay their rent on time each month; those on-time payments could boost their credit scores if they were reported. It's a better deal for those renters with a history of late payments, as these financial mistakes won't hurt their credit scores.

5. Losing a job

You might be surprised to learn that your annual income has no impact on your FICO credit score. Your credit score only tracks how well you pay your bills and manage your credit. It does not care whether you make a $1 million or $10,000 a year.

If you lose your job and your income suddenly dips, your credit score won't budge.

If your reduced income causes you to run up your credit card debt or start paying your bills late, though? That will hurt your credit score.

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