Many consumers are confused by what will affect their credit and worry about making a mistake that will lower their credit scores. Here are some of the things that do NOT affect your credit scores in any way.
Having good credit is essential for a healthy financial life. Not having good credit will not only cause you to be denied credit but will cause you to pay more for any credit you get, with lower limits, and deprive you of opportunities. Just considering a car loan, average credit card usage, and a mortgage, the increased costs for someone with poor credit over just 5 years, in comparison to someone with great credit, can be up to $39,000!!!
Your Income – income is not factored into your credit scores. Actually, there are many people with excellent income that use credit poorly and have low scores.
Your Education – How much education you have or how great the school and ivy league school you may have gone to doesn’t boost your credit scores.
Your Address - Although some zip codes throughout the country can have consumers with greater incomes, magnificent homes, and higher average credit scores makes no difference to your credit score. It is how you pay your bills and manage your credit that counts.
Pulling Your Own Credit - I see so many people afraid to pull their credit for fear of the damage it might do to their credit scores. The only time a credit pull can damage your credit is when you actively apply for credit or a loan. YOU pulling your own credit report is considered a soft pull and NEVER affects your scores no matter how many times you may pull it.
Rent Payments – Private landlords don’t generally have access to the credit bureaus and the large rental companies don’t report to the bureaus unless you leave a balance or do damage at the end of your rental.
Your Spouses Credit – Everyone’s credit history is kept separately at the credit bureaus. The only time credit information will affect the other partner is when the borrowing is done jointly, or, if you co-sign for someone else.
Credit Counseling – The FICO scoring model looks at credit counseling as a neutral event and does not remove points from your credit scores because you asked for help.
Insurance Payments – Car insurance and homeowners insurance companies do not report to the credit bureaus. However, if you fail to pay your bill, a car insurance company can send your account to a collection agency that will report you as a collection to the bureaus.
Utility Bills – Utility companies do not report you to the credit bureaus, so if you are late in paying you may have to pay a late fee but your credit won’t be damaged. You don’t want to be so late that the service gets charged off and sent to collections.
Debit Cards, Pre-Paid Cards – I have been asked on numerous occasions about getting a debit card or a prepaid credit card to help boost one’s credit scores. It won’t help. Since there is no credit being extended, just a convenient way to use your own money, these cards are never reported to the credit bureaus.
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Credit Scoring Advisor provides credit repair across the US.
contact us at 631-465-9565 for more information
contact us at 631-465-9565 for more information
