Have you ever considered how your gym membership might be affecting your credit score?
Many people are unaware that missing out on paying their gym memberships could negatively affect their financial health. Results from a recent YouGov survey conducted across 17 international markets showed memberships, like gym memberships, were among those that consumers most likely missed paying in 2023.
William Bergmark, a personal finance expert and editor at Credwise, reveals six ways your gym membership could be secretly tanking your credit score.
Are you locked into a long-term contract?
Many gyms require members to sign lengthy contracts, often with automatic renewals. If you’re unable to keep up with payments, it can lead to missed payments reported to credit bureaus. Always read the fine print and understand your financial commitment before signing.
Have you experienced unexpected fee increases?
Some gyms raise fees without clear communication, leading to insufficient funds in linked accounts. This can result in overdraft fees and missed payments, both of which negatively impact your credit score. Regularly review your gym’s payment terms and your account statements.
Are you unknowingly damaging your credit with poorly timed gym payments?
The timing of your gym membership payments can affect your credit score, especially if they’re due at the end of your billing cycle, potentially inflating your credit utilization ratio. Understanding your credit card’s billing cycle and strategically timing payments can help maintain a healthier credit profile and potentially improve your credit score over time.
Has the gym run a hard credit check?
Some fitness centers perform hard credit inquiries when you apply for membership, especially for premium plans. These inquiries can temporarily lower your credit score. Ask if a soft credit check is an option before applying.
Are you dealing with billing disputes?
Unresolved billing issues with your gym can lead to collections accounts if left unaddressed. Even small amounts sent to collections can significantly damage your credit score. Address any discrepancies promptly and keep detailed records of all communications.
Have you cancelled your membership properly?
Many people assume cancelling a credit card or closing a bank account will stop gym payments. However, this can lead to continued charges. Always follow the gym’s official cancellation procedure to avoid unexpected fees.
William Bergmark concludes:
“The connection between gym memberships and credit scores is often overlooked, but it’s crucial for maintaining financial health. Being aware of these potential pitfalls can help individuals make informed decisions about their fitness commitments without risking their credit score.
To protect your credit score while enjoying your fitness journey, always read contracts carefully, set up alerts for payments, and communicate promptly with your gym about any billing issues. If you’re struggling to manage payments, consider negotiating with the gym or exploring more flexible, pay-as-you-go options.
Remember, a good credit score opens doors to better financial opportunities, from favorable loan terms to improved insurance rates. By being vigilant about how your gym membership affects your finances, you can stay fit without compromising your credit health.”