Your credit rating could tank by making these common mistakes

Even for those with generally good spending habits, some common mistakes can tarnish, or even outright tank, a credit rating - and it's not always as obvious as serious debt.

Before reaching financial milestones such as a car, home, or savings account, a credit rating might be the only thing young people own.

“Credit is a highly valuable asset,” says Ed Rempel, a fee-for-service financial planner, tax accountant and author of the blog Unconventional Wisdom. “In fact, it is your main asset until you can build up other investments.”

Even for those with generally good spending habits, some common mistakes can tarnish, or even outright tank, a credit rating – and it’s not always as obvious as serious debt.

Rempel sees a lot of disputes with phone companies dragging down credit ratings.

A person may dispute a bill and refuse to pay it out of principle until the complaint is resolved. This becomes a debt that goes into collection and your rating can take a major hit, Rempel says.

Unpaid parking tickets, gym memberships and retailer credit card balances can create similar issues, says mortgage broker Shannon Mayhew.

“It is the little things,” says Mayhew, owner of West Coast Broker. “Maybe you moved and you didn’t receive the statements – that’s usual story that we get: ‘I didn’t receive the statements. They didn’t contact me.’ Maybe there’s some extra charges that came on after they thought they paid the balance.”

One of Rempel’s clients was a lawyer who disputed a $50 charge with a company, assuming the company would never sue a lawyer for such a small amount, Rempel says. Years later, trying to buy a home, his rating took a hit from the small outstanding collection.