You want a good, clean credit report, right?  Of course you do. We all want to keep our credit as tidy so we can borrow money at a low interest rate and keep our insurance rates and security deposits down.  It is very important to work on raising your credit score, but it is also important that you understand what does not affect your score.  That way you won’t spend time worrying about things that just don’t matter.

Here are 6 things that can’t hurt (or help) your credit scores:

 #1: Your Personal Information

Personal information such as your name, current and previous addresses, Social Security number, and birth date is included on your credit report with each of the three main credit reporting bureaus.  However, this information does not have any bearing on your credit score. They also cannot factor in your age, education level, race, gender or marital status. 

 #2: Income Changes

Most people are surprised to learn that income isn’t included on your credit report.  As long as you continue to pay your bills on time, earning less has no negative effect on your credit scores.  However, creditors generally ask for your income information on their applications. So, making less money could be a stumbling block to getting new credit because in addition to your credit score, your income, expenses, and job stability are taken into consideration by a lender.

#3: Getting Turned Down for Credit

Although your credit report does show who has been looking at your credit report, your credit report doesn’t show whether an application for a loan or credit card was approved or declined.  Don’t worry if you’ve been turned down for credit.  This has absolutely no effect on your credit score

#4: Paying Small or Local Companies

Bills you pay to small companies or individuals for local services like lawn care, pest control, or rent, usually don’t show up on your credit report. The main credit bureaus have strict requirements about who can report consumer information to them, and in many cases it’s just not feasible for small businesses to do so.

If a merchant doesn’t report payment information to the credit bureaus, then your payment history with that company can’t affect your credit scores. However, if you don’t pay up and they turn your account over to a collection agency, that’s another story! Collection companies will report information to the credit bureaus as soon as they acquire the debt.

 #5: Adding an Authorized User

Adding someone to your credit card as an authorized user allows them to get a card in their name and to make charges up to the credit limit that you allow. An authorized user has no legal responsibility to repay the debt. Their credit situation can’t affect yours in any way.

However, your credit scores could plummet if an authorized user abuses a credit card and you can’t afford to make the minimum monthly payments. So always be cautious about adding anyone to your credit cards.

#6: Checking Your Own Credit

Many people worry about pulling their credit report because they think that it will count against them. Pulling your own credit report is called a “soft pull” and it does not hurt your credit scores.

Understanding what does and does not have an effect on your credit score will help you to focus your efforts in the right areas.  If you need help eliminating debt once and for all, our Debt Solutions Specialist can explain what programs are available to help you no matter what the situation.  Simply give us a call or click on the link for a free debt elimination consultation.

photo by: Casey Serin

It is a big mistake to think that simply making a request for your credit report will hurt your score.

Basic inquires have a small impact

Credit agencies consider inquiries carefully because not all inquiries are related to credit risk.

If you are looking for a new car and the dealership requests a report, for most people, this will have a minimal negative effect of about minus 5 points.

But if you are request additional credit all over town like:

• Loan companies
• Store cards
• Credit cards

... this may indicate greater risk and hurt your score.

Studies have show that people with six or more inquiries on their credit reports can be up to eight times more likely to declare bankruptcy than people with no inquiries.

 Some inquiries are ignored

1)  Your score is not affected if you order a credit report for yourself.

You are entitled to one FREE credit report each year from each of the big three reporting agencies:

• Experian
• Equifax
• TransUnion

This WILL NOT hurt your score!

2) If a lender (credit card company for instance) makes a request for your credit report in order to see if you qualify for a "pre-approved" credit offer, it WILL NOT hurt your credit score.

3)  If an employer (or in the last few years, an insurance company) makes a request for your credit report, this WILL NOT hurt your score.

Multiple inquiries or "rate shopping" is not counted as a negative on your credit score

When looking for a mortgage, student loan or an auto loan, you will most likely want to check with several lenders to get the best rate.

Of course, this will cause multiple lenders to make inquiries for your credit report, but the credit reporting agencies make a distinction between a search for a single loan and a search for many new credit cards or loans!

But, if you are shopping for the best rate for a car, student or home loan, you should do so in a short period of time, say two weeks or less to avoid the appearance of trying to get too much credit too fast!

If your credit score is too low to qualify for the loan you are seeking, DON'T CLOSE DOWN OLD ACCOUNTS!

It is a mistake to think that closing accounts will help, when actually it can hurt your credit score!

Late payments or accounts that have been charged off won't disappear from your credit report just because you closed them.

BEWARE OF FALSE CLAIMS BY CREDIT REPAIR COMPANIES!

Long established accounts are a positive factor of your credit score because it shows you manage credit well.  Don't close these down!

Having available credit that you don't use DOES NOT LOWER your score.  You may have other reasons for closing down old accounts, but don't do it thinking it will improve your score.

If you have too much credit and are having a difficult time keeping up, there are several programs that can help you eliminate the debt and improve your score!

Why not request a FREE CREDIT ANALYSIS.

Got Questions? We've Got Answers

1-877-492-4109

photo by: Kristian D.

The FICO score is the best-known and most widely used credit score in the United States.  Creditors use your FICO score to determine your eligibility for loans, credit cards and other types of credit.  Employers will often request your credit score to ascertain how reliable an employee you might be, should they decide to hire you.

Your FICO credit score contains a host of broad information about your financial life, including your credit history, payment history, the amounts you owe, the length of your credit history, any new lines of credit you’ve recently opened and the types of credit you have used. However, there are many things that are not reflected in your FICO score.

Here are nine things your creditors will not find when pulling your FICO credit score.

1. Your FICO score contains no mention of race, color, religion, national origin, sex or marital status.  Federal law prohibits credit scoring from considering any information of this type. The law also prohibits consideration of any receipt of public assistance, and any mention of rights you have exercised under the Consumer Credit Protection Act.

2. The FICO score does not reflect your age.

3. You FICO score will not mention your salary, occupation, title, employer, date employed or your employment history. Lenders may consider this information looking at your credit report however, as they compare your current salary against your level of debt, to decide whether or not you’ll be able to afford extra payments.

4. You FICO score gives no consideration to where you live.

5. Your FICO score will not consider any particular interest rate being charged on any particular card or account.  So if you find yourself paying a 400% interest rate, it’s no different to the 4% interest rate you also have.

6. The FICO score does not reflect any items reported as child or family support obligations, or any rental agreements.

7. Your FICO will not reflect requests for your credit report. 

8. There are certain types of inquiries the FICO score does not consider. The FICO score does not count any inquiries initiated by the consumer, such as any times you’ve requested your credit report in order to check its accuracy. Any inquiries made by a creditor to pre-approve you (also known as promotional inquiries) are not counted. Also, whenever one of your creditors requests your report to review an account you have with them (also known as administrative inquiries), such requests are not counted. Finally, should a request come from an employer, such requests are not considered.

9. Your FICO score will not mention if you are obtaining credit counseling of any kind.

So, rest assured that your FICO score does not contain irrelevant or discriminatory information. And now that you know what it does contain, you can start working to boost your score: bring down credit card balances, and make payments on time. A better score will be reflected with lower interest rates on loans and credit cards, and that means more money in your pocket.

The most important thing you can do to IMPROVE YOUR CREDIT SCORE is to eliminate debt!

One of our customers resently sent us an email stating:

"My credit score according to my credit tracker just JUMPED to 693! That's the highest it has been in fifteen years."

This client had just completed the DEBT SETTLEMENT program, and his credit report showed all of his accounts had ZERO BALANCE! 

According to the FICO, there are several factors that determine your credit score:

PAYMENT HISTORY

This makes up 35% of your score and is determined by:

• Past due accounts
• Bankruptcies
• Judgments
• Wage garnishments
• Paid as agreed accounts

AMOUNTS YOU OWE

This will account for at least 30% of your credit score and includes:

• The total amount you owe on all of your accounts

• The number of accounts you have opened with outstanding balances.  (Too many accounts hurts your score, so be careful when offered the next STORE CARD!)

LENGTH OF CREDIT HISTORY

• If you have established a decent credit score for several years, you will be rated higher than someone with little or no credit history. 

• If you have not established credit (credit card, auto loan, home loan), then you should consider opening a couple of accounts.

BE CAREFUL!  Many people get caught up in the nightmare of too many credit cards and not enough money to keep up.  The best way to start establishing your credit history is to open ONE CARD, use it wisely, and pay it off each month!

Your are  proving that you have the ability and discipline to manage your credit and will be rewarded with a higher score in the future.

NEW CREDIT

This goes with the previous category, but is a little different and makes up 10% of your credit score.

If you open too many accounts in a short period of time, this is seen as a negative on your report, so take it easy! Also, if there are several inquiries about your credit score in a short amount of tim, this will hurt your credit score.

On the other hand, if a creditor inquires about your credit in order to offer you a "pre-approved" card, this will not hurt your credit.

Too learn more about how inquiries affects your score, click here.

TYPES OF CREDIT USED

This accounts for 10% of your score.

• Having too many store cards and "easier-to-get" credit cards will hurt your score.

• If you have a home mortgage and have a good payment history, this will be a positive for your credit score.

The best way to improve your credit score is to eliminate debt!

If you would like to find out what options are available to you, we can help!

1-877-492-4109