What is Not Factored Into Your Credit Score

credit score factorsThere are a ton of misconceptions out there about what is on an individual’s credit report and contributes to their credit score. Instead of the common discussions about what goes into calculating your credit score, let’s talk about what is not factored into your credit score.

Your FICO score does not take into account:

Your race, color, religion, nationality, sex, or marital status. Credit scoring is prohibited from factoring in any of these things by U.S. law, as well as the exercise of any consumer right under the Consumer Credit Protection Act.

Your age. Young or old, makes no difference in your credit scoring. Some individual businesses may factor in age to their own proprietary scoring, but not your credit score as reported by the three major credit reporting agencies.

Your salary, line of work, position at work, employer, or employment history. Having worked in banking for a few years, I cannot count the number of times I heard someone tell me they have a really high salary, so their credit score must be good. Trust me, I saw plenty of people making well over $250,000 a year, with credit scores far worse than people making $35,000 a year. You could be a doctor, a lawyer, or a garbage man. None of it factors into your credit score.

Where you live. Big city or a small town. Either one has zero impact on your credit score.

Any interest rate being charged on a particular credit card or other account. Many people are under the misconception that higher interest rates will have a negative impact on their credit score. That is simply not true.

Any items reported as child or family support obligations or rental agreements. Pretty simple. Now they can impact your ability to secure a loan. Do not get that confused. Your credit score is just one factor lenders use. They will also look at your total debts and obligations in relation to your income. That is not a part of your credit score, but it is a part of a lender’s decision in deciding whether or not to extend you credit.

Credit inquiries initiated by consumers or by lenders for promotions. Inquiries on your credit report have an impact on your credit score. However, if you request a copy of your own credit report, that does not count. Nor does it count if lenders pull your credit report as a “promotional inquiry” to see if you qualify for a pre-approved credit offer.

Although some people may try to tell you otherwise, none of these items impact your credit score.

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