10 Things that Won’t Affect Your Credit Score
There’s a lot of information out there regarding credit scores – mostly about what is on the report and how to improve your score. But it’s also important to know what won’t appear on your report.
A “Soft Pull”
You might have heard that every check of your credit can lower your score. It depends on what type of check. A “soft inquiry” is a credit check that will not show up on your report as an inquiry, therefore your score won’t be lowered. On the other hand, a “hard pull” or hard inquiry can cause your score to lower. Hard inquiries generally occur when a financial institution checks your credit report when making a lending decision. This can be for a credit card, car loan, mortgage or other types of loans. Hard inquiries could lower your credit score by a few points and might remain on your report for two years. NOTE: SmartBiz performs a soft pull for credit during prequalification. Your credit score will not be impacted.
Although this might seem important, your current or past compensation will not show up on your credit report. A high salary won’t give you a higher FICO score just like a low salary won’t lower your score.
Receiving Public Assistance
Public assistance is the system that provides welfare services. Services are typically provided to the elderly, disabled people and low-income families. Lenders or others who access your credit report will not receive any information related to public assistance programs that you might have accessed in the past or are currently using.
FICO doesn’t consider your age although other types of financial scores might.
Your Race, Color, Religion, National Origin, Sex and Marital Status.
United States law prohibits credit scoring from considering these facts under the Consumer Credit Protection Act.
Your Net Worth
Own a castle and drive a Rolls Royce? Your FICO score won’t be impacted. No matter what you’re worth financially, you should always strive to pay bills on time and maintain a high credit score.
Credit Counseling Participation
Have you used credit counseling to help your FICO score? That won’t have a positive or negative impact or appear on your report at all.
Where you live
Your address has no bearing on credit scores. However, if you’re moving to another country, your credit score doesn’t come along. Credit scores reflect the creditworthiness of U.S. citizens. Other countries have their own systems.
Any interest rate being for credit cards or other accounts
You should always strive to get the lowest interest rate possible. However, if you do have high interest rate credit cards or other types of loans, it’s not reported.
Outdated public records
You need to contact credit bureaus and the Consumer Financial Protection Bureau if any of the following are in your file:
- Bankruptcies – More than 10 years old
- Accounts Charged-Off – More than 7 years ago
- Accounts Sent to Collections – More than 7 years ago
If you’re seeking funds to grow your small business, your credit score is key. A good score helps you get funds at the lowest possible price. The SmartBiz blog is full of helpful information about your score. Check out these informative blog posts: