This happened to my husband and me once. We were applying for our mortgage several years ago, and we were surprised when my husband’s score was about 20 points lower than expected. After going through a three-bureau report with the mortgage lender, we discovered that the culprit was the fact that he had several duplicate accounts reported on his reports, some of them with inaccurate balance information.
We were able to clean up my husband’s credit report, and he enjoyed a bump in his score. Not all issues are quite as straightforward, though. Here are some of the weird reasons that your credit score might be lower than you expected:
- Your credit limit is missing a zero
“One quirk I’ve seen drag some people’s scores down is that their credit limits are not being reported correctly,” says Jason Vitug, with the financial site Phroogal. “At first glance everything seems fine. There might be no derogatory information reported, but the score is high.”
Vitug says that in one case, after combing through the report he realized that, for some reason, the credit utilization was high. This seemed unusual, and on closer examination he discovered that the credit report in question had one of the credit limits listed as $1,000 — instead of the correct $10,000. It looked as though the consumer was routinely going over his credit limit, even though he wasn’t.
Small errors like that can make a big difference. Check your credit report for inaccuracies so you can catch them, and keep them from dragging your score lower.
- Frequent moves
Kevin Haney worked at Experian for more than a decade and now publishes insider insights at SavvyOnCredit.com. He points out that moving too frequently can have an impact on your credit score.
It’s not that moving itself is the problem, but rather the fact that it’s easier for things to fall through the cracks when you change location frequently. If you move, and forget to change your address, or let your creditors go, you might miss a bill or two, and that can lower your credit score.
Another difficult situation is if you regularly break your lease when you move. If you don’t pay what you agreed to, the landlord might decide to turn your account over to collections, resulting in a negative mark on your credit report.
Also, realize that moving internationally can also take its toll. Your credit report doesn’t always follow you around. Different countries have their own reporting agencies, and you may have to start fresh. Your U.S. report might work to get you approved for an apartment or for some other initial financial transaction, but you might need to build up your credit in another country if you plan to stay.
- Duplicate names
If you have the same name as your dad, says Haney, that could result in credit score issues. It’s possible that some of your dad’s bad habits are attributed to you. There are numerous instances in which the credit sins of a parent are visited on a child due to confusion over names in a credit report.
This is also a possibility when it comes to other duplicate names. Someone with a common name, like Mary Smith, might have a number of random bad credit items attributed through confusion. In these cases, you usually have to show documentation, and the credit reporting agency has to verify your identity with the help of your Social Security number.
In general, getting married shouldn’t impact your credit score. However, you have to make sure you follow the right procedures to ensure that your name change is recorded, and associated with your existing credit report. If you aren’t careful with the change, Haney says that marrying the person of your dreams can bring down your score.
However, you still need to be on top of the situation, and check for inaccuracies, since this transition can lead to misreported items.
The good news is that your new spouse’s credit problems shouldn’t affect your credit score. However, if you get a joint loan together, a low score for your spouse could mean that you end up paying a higher interest rate.
You might think that you have a good credit score because you pay your bills on time and keep your debt levels low. However, there are some small quirks that can impact your credit unexpectedly, usually through some inaccuracy on your credit report.
If you want to avoid surprises down the road, it makes sense to check your credit when you can. Signing up with a site like Quizzle can help you keep tabs on your credit situation, so that you can see problems as they arise, and then fix inaccuracies as quickly as possible by disputing the items with the bureaus and/or creditors.