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5 Things That Don’t Factor Into Your Credit Score

Credit Score, Personal Finance
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5 Things That Don't Factor Into Your Credit Score

Your credit report is a record of your history with debt and credit, compiled to create a credit score that tells potential lenders whether you’re creditworthy. Credit scores are made up of several different factors, but there are a few things you might expect to be included that actually aren’t. Here’s what not to look for in your credit score.

1. Income 

You may be surprised to learn that income isn’t included in your credit score, especially because it’s required on new credit applications. While your salary tells potential lenders how much you can theoretically afford to pay toward credit cards each month, it doesn’t address your creditworthiness. Why? Because having a large income and spending it all without regard for your credit card bill is worse than having a small income but using it to pay your bills on time.

2. Marital status

Spouses do share a home and a tax return, but they don’t share a credit report or credit score. Married or single, your credit is your own. But keep in mind, if you apply for credit together (a mortgage would be an example), both of your scores may be pulled to determine creditworthiness.

3. Assets

While debts that require regular payments show on your credit report (like your car loan or mortgage), the things you own aren’t factored into your credit score. Like income, assets don’t necessarily indicate a person’s creditworthiness, so they aren’t included on your credit report or in your score.

4. Age

Your birth year is included on your credit report, but your age isn’t a factor in your credit. Unlike driving, voting, drinking adult beverages or renting a car, you don’t necessarily have to be a certain age in order to have great credit. However, length of credit history does make up a portion of your score — and that can only be built with time. Therefore, if you’re doing everything else right, your credit score will probably improve as you age (but just getting older doesn’t automatically increase your score).

5. Location

Where you live affects your property tax and auto insurance rates, but not your credit score. Of course, this only pertains to living within the United States. Other countries may have different scoring models, so if you leave the country and apply for credit there, your creditworthiness will be judged by a different system.

What is included in my credit score?

Factors that affect your credit score (whether it is the dominant FICO score or its competitor, VantageScore) include:

  • Payment history: This is the most influential factor, so make all of your payments on time, every time.

  • Credit utilization: Keep your debt balance to only 30% of your total credit limit, and lower is even better.

  • Length of credit history: Keep credit accounts open for a long time.

  • Types of credit in use: Have a mix of credit account types.

  • New credit: Don’t apply for too many new accounts at once

All of this data is taken from your credit reports, so make sure they’re accurate. You can get your credit reports annually for free to ensure all the information is correct.

This article updated June 20, 2016.  It originally published July 7, 2014. 

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