Credit Repair

8 Things That Don’t Affect Your Credit

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Miss a loan payment? Ding. Apply for a bunch of new credit cards? Ding. Let your water bill go to collections? Ding. It seems there are a million things you get penalized for when it comes to your credit score. What you often don’t hear over all that dinging, however, are the many things that don’t affect it.

The truth is, while it’s definitely important to protect your credit score, it’s also not as daunting a task as many people assume. Let’s take a look at the many financial activities that leave no mark on your credit.

What doesn’t hurt your credit score

There are several different types of credit scores, and each is calculated a bit differently. Most lenders rely on your FICO Score, which is issued by the Fair Isaac Corp. (Although, there are even different variations of the FICO Score.) In general, these eight things won’t affect any credit score your lenders are likely to consider.

1. How much you make

Whether you’re bringing home big bucks or barely pulling in minimum wage, your salary isn’t listed on your credit report. Now, it may be factored into a lender’s decision to grant you a loan or credit card and affect the interest rate you’re given, but it won’t move the needle on your FICO Score.

2. How much you have saved

If you’ve done a great job saving for a rainy day and have a boast-worthy balance in your savings account, good for you! It’s not good for your credit score, however. It’s not bad either, it’s just not a factor that’s taken under consideration.

3. Your personal demographics

Where you live, your marital status, your age, race, religion — none of that is considered when determining your credit score. In fact, it’s against the law to do so, according to the Consumer Credit Protection Act.

4. Your credit card interest rate

So, you scooped up a credit card with a sky-high interest rate. Yikes! That’s definitely not great for your bottom line, but it doesn’t factor into your credit score. The score keepers are more concerned with the amount of available credit you’re using than the interest rate you’re paying on that debt.

5. Unemployment

Losing your job can be painful, but don’t stress about it affecting your credit score. Neither your employment status nor any unemployment benefits you receive ever appear on your credit report. Of course, if losing your job keeps you from paying your bills on time, or forces you to max out your credit cards, then your score may take a hit. But the fact that you’re unemployed alone isn’t a factor in calculating your credit score.

6. Credit counseling

If you’re receiving or have received credit counseling, be proud that you’re trying to get your debt under control. But don’t expect it to move the needle on your credit score. If you repay a debt that has been negotiated through a credit counseling program or debt management plan, there may be a note indicating that on your credit report. But it won’t negatively affect your score. Paying off your debt, on the other hand, will give your score a boost in many cases.

7. Checking your credit report

While multiple hard inquiries by credit card companies in a short period may drag down your score, checking your own credit score or reports will not. In fact, it could indirectly help improve your score if you find errors on your report and have them corrected. As many as 1 in 5 credit reports contain errors, according to the Federal Trade Commission, so it’s definitely worth taking a look.

8. Being denied credit

If you apply for a loan or credit card and are turned down, the refusal may sting. But it won’t be factored into your credit score. Your rejection is yours to mourn privately.

What hurts your credit score the most?

So, what does hurt your credit? The biggest factor when it comes to your FICO Score is your payment history, accounting for 35% of your score. If you pay your bills late or let them go to collections, your score will definitely get dinged.

The next biggest determining factor is amounts owed. It’s not so much the total amount you owe though, but rather how much of your available credit you’re using. For example, someone who has $20,000 in debt but $100,000 in credit available to them may be better off than someone who has just $2,000 in debt but only one credit card with a limit of $2,500.

Bottom line

Your credit score is, undeniably, important. However, you don’t have to have to worry about every little move you make affecting it. Do what you can to pay your bills on time, use credit cards wisely and limit debt in general and, in most cases, you’ll be able to dodge major dings.


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