There are many rumors and misconceptions about what exactly goes into a credit score. A lot of things are taken into consideration when determining a credit score, but here are 10 things that won’t affect your credit report at all.
1. Net Worth
You can have a billion dollars’ worth of bonds and stocks, nine beach houses, six yachts, and four mansions. None of these show up on your credit report, and your credit score won’t be changed by them.
2. Whether You’re Employed Or Not
Your employer does show up on your credit report, but it changes nothing. Employment is not a factor in whether you have good credit or not.
3. Paying Your Bills On Time
People think paying their bills on time means their credit report must look good. Newsflash- it doesn’t. It’s a common misconception to think that you get rewarded for paying your bills on time, but you don’t.
If you DON’T pay your bills on time, they may get passed onto a collections agency, and THAT shows up on your report. Having been to collections royally screws up your credit report.
4. Checking Your Credit Score
There are two ways to check your credit report: a soft inquiry and a hard inquiry.
When you check your credit score individually, you’re performing a soft inquiry. This doesn’t affect anything.
When you want to borrow money or get a credit card, the lender performs a hard inquiry. Hard inquiries are what harm your credit score. The idea is that if you’re constantly making hard inquiries, it means you’re constantly looking for credit. Looking for credit means you’re not in a great financial state, right?
5. Debit Cards
The debit card myth. A debit card has money you’ve already earned on it. It’s already YOUR money. Your use of it tells credit agencies nothing about how reliable you’d be in paying back THEIR money. Therefore it doesn’t affect your credit rating.
6. Bank Overdrafts
As long as you pay back the overdraft before it gets sent to a collections agency, you’ll be fine. Those overdraft fees cost a lot though!
7. Age
As long as you are over 18, credit agencies don’t care about your age.
8. Being On Child Support/Alimony
Financial assistance, governmental or otherwise is not an accurate judge on whether you can reliably pay back the lender’s money.
9. College Degree
Lenders do not care about your Alma Mater.
10. Going To Jail
Your criminal record is ignored by credit companies. Being locked up has no bearing on whether you can pay your debts or not. It’s the 21st century.
Having an accurate estimation is always a difficult thing to have when trying to have an idea of what your credit score could be. These are just some of the things you don’t have to worry about when it comes to your credit report.
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