Your credit score is important. You’ve heard it a thousand times, from your parents, financial advisors, TV advertisements, and seemingly everyone in between. They are, of course, correct. Your credit score impacts how much you will pay for a credit card, mortgage, or any number of loans. Many things affect your credit score, but there are also numerous factors that play no role in how this all-important number is computed. Here are twelve things that you don’t need to worry about when it comes to establishing a good credit score.
Anything not in your credit report - There is a wide range of information in your credit report, including payment history, level of indebtedness, length of credit history, and types of credit used. Your credit score won’t take into account anything outside of the credit report.
Certain types of credit inquiries - Three types of credit inquires you might have thought count do not. They are:
- Consumer Initiated Inquiries – Those in which you the consumer makes a request to check your credit report, will not affect your score.
- Promotional Inquiries – Those made by lenders in order to make you a “pre-approved” credit offer won’t affect your score.
- Administrative Inquiries – Those made by lenders to review your account, won’t hurt your score.
The credit inquiries that do affect your score are requests made because of an application you made for credit. These are referred to as “hard inquiries”.
Job - Your credit score doesn’t look at what type of work you perform or the title you hold. Your role as Google’s next CEO won’t help you in this case.
Employment history - The name of your employer, the length of your employment, or your general employment history is not considered to determine your credit score.
Salary - Since your credit score does not look at your salary, you can still have a high income and a poor credit score, and vice versa. You could be Bill Gate’s secret child and the wizards who calculate your credit score won’t care.
Age – Anyone who is a parent will likely find it amusing that age sometimes isn’t considered when assessing how risky you are as a borrower. The FICO credit score, which is the most widely recognized score, does not look at age. Other types of credit scores might consider age.
Location - Although your zip code might serve as a status symbol in the real world, your credit history won’t be impacted by where you live.
Race, religion, national origin, sex, and marital status – It is against the law for your credit score to take into account any of these factors.
Credit counseling – If you need advice about a credit issue, seek it. You don’t have to worry that participating in credit counseling of any kind will keep you from achieving a high credit score.
Credit card interest rates – Although the high interest rate on your credit card might be a constant pain in your neck, it will not impact your score.
Support obligations or rental agreements – Items that are reported as child or family support obligations or rental agreements are not considered for your score.
Information not predictive of credit performance – Unless information has been proven to be predictive of your future credit performance, it’s not weighed in your credit score.