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Some storming matters that may damage your Credit Scores

Some storming matters that may damage your Credit Scores

We all know that making late payments or having credit card accounts in collections can hurt your credit scores. But you might be shocked to learn that a lot of other seemingly innocent actions can also negatively impact your credit rating.

Some Storming Matters That May Damage Your Credit Scores

Here’s a list of five surprising things that can lower your credit scores — and keep you from having a stellar credit report.

Some Storming Matters That May Damage Your Credit Scores

Renting a Car with a Debit Card

Some Storming Matters That May Damage Your Credit Scores

I learned about this credit-busting issue the hard way: after I rented a car in 2009 from Avis using my debit card.

Some Storming Matters That May Damage Your Credit Scores

I thought I was being responsible by using a debit card linked to my checking account. After all, I figured, a debit card would help me avoid unnecessary credit card debt bills and stick to my zero debt lifestyle.

Some Storming Matters That May Damage Your Credit Scores

In the fine print of its rental agreements, Avis includes a clause that basically says the company has the right to pull your credit report if you use a debit card as opposed to a credit card. In all fairness, most other car rental companies have contracts with the same clause.

Some Storming Matters That May Damage Your Credit Scores

This makes absolutely no sense to me, especially since under the Fair Credit Reporting Act, companies that pull your credit rating are supposed to have a “permissible purpose” – as is the case when you’re seeking a loan, credit or employment.

Some Storming Matters That May Damage Your Credit Scores

But renting a car doesn’t fit into any of these categories. Obviously, car rental businesses see it differently. They want some extra protection for the privilege of “loaning” you a vehicle. If that’s the case, instead of pulling credit reports, why don’t they simply ask debit card users for upfront deposits, just as they do with those who pay by cash or credit card?

In any event, after I made the mistake of using my debit card to pay for my Avis car rental, the next day I received an email alert from my credit monitoring service. It notified me that there was an “inquiry” on my credit report from Avis and that my FICO credit score had dropped by 14 points. Needless to say, I’ve never used a debit card at a car rental company since.

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