After graduating with my master’s degree — and with about $30,000 in student loans — I was obsessive about my credit score.
I monitored it weekly, paid off credit card purchases immediately, and checked my credit report quarterly.
In 2014, I was so proud when my credit score hit 785, putting me in the excellent borrower category.
However, my glee did not last long. A few weeks later I checked my report, only to find my history wrecked. In a short span of time, I had poor credit. My score dropped by nearly 100 points.
My pursuit of perfection
I worked really hard to get a good credit score. And while I never achieved the perfect score of 850, my 785 credit score did make my life easier. I never had to worry about landlords approving me for an apartment, and I got great interest rate offers for car loans. I signed up for a credit card with fantastic rewards and a large credit line with no problem.
Having excellent credit was a luxury I got used to and enjoyed. So when I saw my credit score had dropped to 695 — which put me in the “average” range — I was devastated.
My damaged credit
When I first saw the credit score drop, I assumed there had been some mistake. I thought someone had stolen my identity or a credit bureau had accidentally included someone else’s accounts.
I immediately reached out to each credit bureau to get them to put a freeze on my accounts. And I reached out to my credit card company to notify them about potential fraud and to get a new card.
In the meantime, I examined my credit report line by line, determined to find the mistake or fraudulent activity.
But there was nothing crazy or unexpected on there. The only thing that I didn’t immediately recognize was a $26 unpaid fee that my report said I owed to a collections agency.
I assumed it was an error, and with such a small charge, I figured it would be easy to fix my credit. I contacted the collections agency, expecting them to remove the charge from my account quickly.
But that wasn’t the case.
My library book nightmare
When I spoke to the collections agency, they told me that the charge was late fees I owed on a library book I had taken out in high school.
My local library had launched a new policy: They would turn over library accounts with over $25 in late fees to a collections agency and report the delinquent account to the credit bureaus.
Because I had gone away to college, then moved to another city after graduation, I never received any notification from the library.
Getting rid of the charge was not as easy as paying the $26 unpaid fee. The collections agency added penalties to my account, and to clear the charge and for them to remove it from my credit report, I had to pay them over $200.
And unfortunately, paying the fee didn’t magically fix my credit score. It took me another two years to rebuild my credit score back to the high 700’s.
3 weird things that can impact your credit
As it turns out, my experience wasn’t that strange. I have since learned that many libraries have similar policies. And there are many other bizarre factors that can hurt your credit.
Electronic toll systems are very common now. And because they are so convenient, it’s easy to forget about your account balance and go through the toll lane without thinking about it.
But if you do not pay the toll, the sensors can track your license plates, and the state will charge you a fee. If you miss the bill or do not pay it, they can send your unpaid tolls to collections.
If you get a parking ticket, pay it off right away or appeal it as soon as possible. If you delay taking care of it with the intention of getting to it later, the city may send it to collections, damaging your credit.
A gym membership always seems like a fantastic idea at the time, especially when the gym offers discounts. But if you sign up and stop going and miss payments, the gym can send your account to collections, too.
Make sure you pay your bill or end your membership, per their instructions, to prevent hurting your credit.
Maintaining your credit score
Your credit score significantly impacts your financial life. It affects everything from getting a home to your options for refinancing your student loans. To prevent any issues, check your credit report regularly.
Remember, you can check your credit report for free at AnnualCreditReport.com. Take out a report from each of the three credit bureaus — Equifax, Experian, and TransUnion — once a year, too. If you’re worried about fraudulent charges or weird activity, you can stagger your reports, taking one out every four months.
As my library book debacle shows, monitoring your credit report and checking for even small discrepancies is important. This can ensure you take care of any issues before they become even bigger problems.
Interested in a personal loan?Here are the top personal loan lenders of 2018!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.95% to 35.89%*. The origination fee ranges from 1% to 6% of the original principal balance and is deducted from your loan proceeds. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at the time of application. The average origination fee is 5.49% as of Q1 2017. In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,025 if your APR is greater than 12%. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months. Borrower must be a U.S. citizen, permanent resident or be in the United States on a valid long term visa and at least 18 years old. Valid bank account and Social Security number are required. Equal Housing Lender. All loans are subject to credit approval. LendingClub’s physical address is: LendingClub, 71 Stevenson Street, Suite 1000, San Francisco, CA 94105.
†Per reviews collected and authenticated by Bazaarvoice in compliance with the Bazaarvoice Authentication Requirements, supported by anti-fraud technology and human analysis. All reviews can be reviewed at reviews.lendingclub.com
**Based on approximately 60% of borrowers who received offers through LendingClub’s marketing partners between January 1, 2018 to July 20,2018. The time it will take to fund your loan may vary.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|7.73% – 29.99%||$1,000 - $50,000|
|6.26% – 14.87%1||$5,000 - $100,000|
|6.99% – 35.97%*||$1,000 - $50,000|
|5.99% – 24.99%2||$5,000 - $35,000|
|4.99% – 29.99%3||$10,000 - $35,000|
|5.99% – 18.99%4||$5,000 - $50,000|
|15.49% – 34.49%5||$2,000 - $25,000|
|6.95% – 35.89%6||$1,000 - $40,000|
|6.99% – 18.24%7||$5,000 - $75,000|
|9.95% – 35.99%8||$2,000 - $35,000|