Money Talks Monday (2/12/18)

Do you understand all the many facets that contribute to your credit score?

Most Americans over the age of 18 are aware they have a credit score, but are often unaware of many items that affect it. Many live under the false belief that if bills are paid on time they will maintain a decent or good credit score standing. This is not always the case.

Your credit score is derived from many factors you may not even think about. Violations and fees you might never consider often negatively impact your credit. Parking tickets, speeding violations, vehicle registration taxes, income tax penalties, and even overdue library books and rented DVDs all have the potential to negatively impact your credit score. Most people never think an overdue library book could lower their credit score, but it certainly can. A library book more than 30 days overdue can lower your credit score by sometimes 20 points. Toll roads and parking meters in most major cities, including many of North Carolinas larger cities such as Raleigh, Charlotte, and Greensboro all report violations and late payments to credit bureaus.

Why have I chosen to bring this up in Money Talks Monday? It is quite simple. Many people today rely so heavily on communication via social media, they fail to open/read postal service mail or even their email. People fall into the comfort zone of social media messaging and often neglect the mail in their mail or their inbox. Notifications of all of the above hidden demons that negatively effect your credit score come via mail or email. Of course, it is of the utmost importance you stay on top of all payments and deadlines, avoid violations and fees, and when received, pay them immediately. However, you must ensure you take time to read your email and open every piece of mail you receive. Being proactive with what many would consider passé forms of communication is essential to staying on top of your credit score.

Let's examine an example. You are attending rehearsal at the 2018 Miss North Carolina Scholarship Pageant and you park in one of the many metered spaces around the Duke Energy Center for the Performing Arts. You are very vested in the rehearsal and forget to pop out and reload the meter with quarters. When you depart you breathe a sign of relief not to find a parking ticket on your windshield. That does not mean you did not receive one. In order to ensure payment and to cut down on paper and labor costs, many cities have gone to video monitoring of metered spaces or mailed parking tickets; mailed tickets prevent an agent from having to produce a paper a ticket, the time doing so involves, and the proclivity for risk weather may alter or displace the ticket from your car. If you are not checking and reading your mail, you may miss a parking fee of $8 that, in 30 days, becomes $40 or more and becomes a strike on your credit score. You see, the ticket and a photo of your car parked in the metered space comes from the City of Raleigh in your mailbox with an option to pay the fine online or through postal mail by a certain date. If you fail to do so, the fee escalates and the ticket is reported to the nation's three largest credit bureaus.

Yes, paying your bills on time and maintaining healthy debt helps build and sustain a good credit score, but those hidden demons can cause major damage if you do not stay on top of your postal and email. Make sure you set aside time at least once daily to read your emails and once weekly to thoroughly go through your mail. You do not want to miss anything that might pull down a credit score you work hard to maintain. Check back next week for Money Talk Monday and we will continue to talk money and provide you with tips to help your financial health!