Apr21
Factors that Won’t Lower your Credit Score
It seems as though financial experts are telling us every day of the many things we can do to destroy our credit. In fact, we hear so much bad news that we begin to think that, well, everything we do (or don’t do) will have a negative effect on our credit score.
Make no doubt about it: We must remain responsible and vigilant when it comes to maintaining our good credit. But there are a number of things that simply have no effect on our credit (so rest easy):
- Your income – Simply put, your income has no effect on your credit score. In other words, an individual making six figures can have a lower credit score than another individual making minimum wage.
- Your utilities – Failing to pay on your utility bill will not affect your credit score, regardless of what you may have heard. If you miss a utility payment the credit reporting agencies will not know of this because utility companies do not report payments to them. However, there is one exception: if you continually fail to pay your utility bills, the utility company may send your account to a collections agency, in which case your failure to pay your utility bills will certainly put a dent on your credit score.
- Bank overdrafts – Although overdrawing your bank account is an unpleasant, and often expensive, occurrence, the fact of the matter is that is won’t have a negative impact on your credit score, provided you settle your account in a reasonable amount of time. Otherwise, your bank can send your overdrawn account to a collections agency, which will then negatively affect your credit score.
- Your age – The credit reporting agencies do not hold your age against you, just like being of a certain age does not help your credit score. The only thing you may have going for you regarding your age is the time you have to establish a strong credit score.
- Your rent – Paying your rent on time, unfortunately, does not have any effect on your credit score. The only exception to this, however, is if you fail to pay your rent and your landlord takes you to collections for the debt.