7 Factors That Don’t Affect Your Credit Scores
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December 6, 2021
9 Things You Probably Didn’t Know Could Ruin Your Credit
December 6, 2021You undoubtedly know that having excellent credit boosts your money like hot air in a balloon. It enables you to borrow at cheap interest rates, saving large sums of money on debts and credit cards.
Furthermore, having good credit can help you in unexpected ways, such as you have to pay lower premiums for auto and home insurance, you can impress potential employers who use credit in their hiring process. Moreover, you can get approved to rent an apartment or home, and paying low or no security deposits for utilities and cell phones.
While it's crucial to boost your credit ratings, it's also important to know what can't help or hinder them, so you don't sweat the minor things. Read on for the nine characteristics that don't affect your credit ratings.
#1: You are Checking Your Credit Reports Frequently
Pulling your credit reports results in a "soft inquiry," which never hurts your credit ratings. So, don't be hesitant about examining your files.
Checking your credit reports periodically is the most excellent approach to looking for errors, identifying fraudulent activity, and stopping an identity thief in his tracks
#2: Changes in Income
You may be shocked that your salary is not mentioned in your credit reports. So, earning less or having a shift in your income sources doesn't affect your credit ratings.
There's no correlation between how much you make and your credit. You may have good credit ratings no matter if you're working, jobless, getting government assistance or living paycheck-to-paycheck.
Of course, losing your work or company revenue might adversely damage your capacity to pay your payments on time, which is a significant element in how your credit ratings are computed.
#3: Your Personal Information
There happens personal information in your credit reports. However, it's restricted to your name, current and past residences, Social Security number, age and public information, such as a registered lien or bankruptcy.
Since your credit files never contain your race, gender, marital status, education level, religion, political party or income, such facts can't be considered in your credit ratings.
#4: Being Refused Credit
If your request for credit is turned down, you may fear that it may ruin your credit. But your credit reports don't reveal whether an application for a loan or credit card was granted or refused.
#5: Making Purchases on a Debit Card
Since your credit reports only cover credit accounts, bank accounts are not included. Therefore, using a debit card connected to your checking or savings account never helps you develop credit.
Aside from a tiny and temporary ding for having a "hard inquiry" on your report, there isn't an extra penalty for being refused credit.
#6: You are Paying Someone Else's Expenses
If you want to extend a family member or friend a favour by paying their credit cards. Regardless of who pays a payment, it only gets recorded on the individual's credit file who owns the debt.
#7: You are Adding an Authorized User to Your Credit Card
Adding someone to your credit card as an authorized user enables that individual to receive a card in their name and make purchases up to the credit limit you allow. The user's credit position can't harm yours in any way, but you may assist them in developing credit by making regular payments each month.
However, your credit scores might collapse and burn if an authorized credit card user abuses the account, and you can't afford to make minimum monthly payments. So, always be wary about adding someone to your credit cards.
Conclusion
Your credit score is based on a range of characteristics and may be used to decide if you will qualify to borrow money and the terms and conditions, including the interest rate of the loan. Consistently paying your payments on time and in full can assist avoid harm to your credit score in the future.
About the Author
Rahman Muzaffar
Assistant Manager, Real EstateTreadstone Associates
1 (844) 900 1070
