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What Affects Credit

(Hidden Credit Monsters)

Plastic isn’t the only way to sink your credit score. Credit comes in many shapes and sizes, and sometimes it hides behind clever marketing. You might use one of the following services because it’s convenient, or because it solves an immediate problem, but these hidden credit monsters can haunt your credit report if you aren’t careful. Read on to learn more about what affects credit that you may not have considered.


Who hasn’t felt a twinge of excitement looking at those blank checks sent by their credit card company? They have your name printed on them and everything. It would be so easy to tear off one of those bad boys and spend to your heart’s desire.

But even though it looks like a check, a cash advance from your credit card company is the same as charging it to your card — and actually worse, because most cash advances come with higher interest rates, fees and other hidden charges. You may not realize until after you’ve dropped your credit card’s entire limit at the Apple store.


No, “alternative” doesn’t mean grunge rock bankers wearing flannel shirts and ripped jeans.

Young adult considers what affects her credit and how to keep good credit.

Alternative financial services (AFS) means things like payday loans, pawnshops, auto title loans, tax refund advances and rent-to-own stores.

Not to say that using these services is always a bad decision, but interest rates on some of these “deals” can be up to 400%. That means you could pay 4 times the amount that you borrow for the convenience of these options. And they can become a vicious cycle.

Hipster man looking up his credit score on mobile device.

If you can’t pay back a payday loan right away, for example, you might have to take out another loan just to keep up with payments.


If a store or online retailer offers anything “interest-free,” you should look very closely for the catch. Often this means that interest won’t be charged at first, but that after a period of time the interest will kick in. And at a higher rate than you might have paid otherwise.


We live in the age of the loyalty card. Everyone from your grocery store to your favorite department store wants you to sign up for their special card. But there’s a difference between a membership card and a credit card. If the store is offering a Visa or Mastercard with their name on it, it counts as credit. The same is true if you pay for any service in installments over time by opening a credit account. It might not seem like credit at first, but these accounts will show up on your credit report.

Credit can be an asset if used properly and responsibly. So while swiping a credit card or taking a cash advance may feel good in the moment, you might regret it later. Stay informed about what affects credit, and you’ll like the look of your credit report.

As always, we’ve got your back. — The On Your Own Team End of article insignia

[Any reference to a specific company, commercial product, process or service does not constitute or imply an endorsement or recommendation by On Your Own, the National Endowment for Financial Education or any of its affiliate programs.]