Factors that do [and don't] affect your credit score

Posted January 25th, 2018

Everybody knows a high credit score is a good thing. Right? But do you know everything that influences your score? We’re taking a closer look at all the factors that do, and do not, affect your credit score.

Here are 5 things that DON’T affect your score:

1. Your job and how much money you make
Your credit score comes from the information in your credit reports, which list your credit accounts and your payment history. Those reports do include some employer information, but it’s used only to make sure account data is matched to the right person.

2. Your bank balances
Credit reports list only credit accounts and how you paid them, not savings, checking or investment accounts. Your resulting credit score depends largely on whether you paid creditors on time and not at all on whether you’re sitting on a pile of money.

3. Debit cards and prepaid cards
These cards work like credit cards at the register, but no one extended you a line of credit. You’re essentially your own creditor because you’re either paying as you go from a bank account or prepaying to load the card. No line of credit equals no effect on credit score.

4. Your spouse’s track record with credit
Studies show people prefer to date people with good credit, but marrying someone whose credit reputation has been a little shaky won’t tarnish yours. Every person’s credit reports — and therefore credit scores — are separate and individual. However, opening joint credit accounts or co-signing a loan with your spouse could affect your report.

5. Late fees
This is a tricky one. A late payment can’t be reported on your credit reports until you’re at least 30 days past due. Until then, you’ll just face a late fee from your lender or credit card issuer. As long as you get that payment in before the 30-day mark, you avoid a delinquent mark on your reports and the score damage that follows.

Here are 5 things that DO affect your score:

1. Payment history
This is the single biggest influence on scores, so paying on time is key to a great score.

2. Credit utilization
The second-biggest factor affecting your score is how much of your available credit you use. It’s best to keep your balance on any credit card below 30% of your limit — and lower is better.  

3. Length of credit history
The longer your track record, the better, so don’t close old accounts unless you have a good reason, like avoiding an annual fee.

4. Mix of accounts
Having both credit cards and installment loans helps.

5. Inquiries on your credit
When you try to open new credit accounts, each application can cause a small, temporary drop in your score. Checking your own credit has no effect on your score.