Watch Our for Credit Score Damage

There's more to your credit score than meets the eye. Credit bureaus take into account all your personal financial matters when evaluating your credit worthiness, including seemingly insignificant items like unpaid parking tickets and library fines.

Can a librarian derail your chances to get a great rate on a mortgage loan? Because of the way credit bureaus calculate your credit score, the answer is yes. Late fees from libraries, parking tickets, and a host of other poor credit habits can have an impact on your overall rating. Keep an eye out for the following damaging effects.

Late pays on anything and everything

Most people understand that late payments on credit cards or loans can lower your credit score. But it may come as a surprise to learn that late payments, such as library fines and parking tickets, also count. Government agencies can (and will) report late payments to credit bureaus, so return those books on time and pay the meter maids promptly. Utilities are also becoming more aggressive in reporting late pays.

Credit card consolidation

Another area bureaus scrutinize is the amount of debt that you're carrying. They'll evaluate your lines of credit, especially the amount of breathing room between your current balance and your credit limit. Keep yourself 20 to 30 percent under your credit limit to show that you're not maxing out your cards. If you decide to consolidate all your debts onto one low-interest credit card, be sure that the new balance doesn't nudge up against your credit limit.

Don't shop 'til you drop

Credit bureaus don't like it when people routinely open new lines of credit. It's a red flag that you're having problems with your cash flow and need to find another place to stash your debt. Keep this in mind if you're shopping for a new credit card or home mortgage. Don't draw out the process; instead, shop around to a few different lenders within a one-month period. Lenders will submit credit inquiries to evaluate you as a borrower and, if they're clustered, it's an indication to the bureau that you're shopping is a one-time event, and not a regular frenzy.

The big three to avoid

Life throws everyone a curve from time to time, and credit bureaus will eventually forgive you for a late payment or two. However, if you incur collections, liens, or judgments, that's an ironclad indicator that you're a significant credit risk. It can take years to recover from these kinds of credit blemishes, so do everything you can to avoid a backslide of this scope.

Lenders tend to be a rather persnickety bunch when it comes to doling out money. They demand a thorough analysis of potential borrowers. Credit bureaus appease them by analyzing not only late pays from credit cards and loans, but also debt-to-income ratios, your credit limits, and even any overdue library fines and parking tickets. Every financial transaction ultimately impacts your score: Be diligent, and you'll avoid credit score problems.