FICO Score Factors that do not impact credit scores are important to know. Once you know what is not contained in your credit score you can look at what you need to know to improve your scores. Improving your credit scores can be fairly simple if you know what you are doing or not doing.
Credit Scores Do Not Discriminate
As with so many policies in the U.S. credit scores do not include information about Race, religion, color, sex, marital status, and national origin in calculating scores. Credit worthiness and predictions about your future credit performance has nothing to do with whether you are married, or a single jewish male. So if you are thinking that these factors matter in your scores you can relax.
FICO scores also cannot be calculated based on your receipt of public assistance or your income, salary, occupation, job title, profession, date you started working, or employment history. Believe it or not, one of the worst credit scores I have seen belonged to a rich doctor and one of the best that I have seen came from a college student who travelled around the world for a year with no job using his credit cards.
As you might see with this last example with the student travelling around the world for a year, your scores have nothing to do with where you live. Although having a mortgage account on your credit history can have a positive impact on your scores whereas a rental history does not show up on your credit history nor does it impact your scores.
Interest Rates Do Not Affect Credit Scores
Another misconception credit scores is that they are impacted by the interest rates that you are being charged on any of your accounts. If your accounts are in good standing and you have interest rates of 8 percent on one card and 14 on another your scores will not be negatively by the difference in the interest rates. What will impact your scores is if you miss or are late on your payments to either of these cards, or if you have balances that are greater than 50% of the credit limits on the cards.
Not All Credit Inquiries Hurt Your Scores
Have you ever heard that any type of inquiry into your credit report hurts your score? Well, some kinds of inquiries do not impact your score - not even one point. One inquiry that doesn't impact your score is one that you initiate. Incidently, it is a smart idea to initiate a credit check on your own credit at least once a year. This is an important thing to do to make sure that you are not a victim of identity theft, or someone stealing your credit card information, or to check for other types of errors that creditors might report.
Other types of inquiries that don't hurt your scores are promotional pulls that result in "pre-approved" credit card offers, and routine credit checks from lenders and credit companies. Employers are also able to pull your credit and not impact your credit scores. See Shopping For A Mortgage: How It Impacts My Credit.
CCCS Does Not Hurt Your Credit Scores
Participation in a consumer credit counseling program does not impact your scores if your bills continued to get paid as you originally agreed to pay them. Some improperly run debt management or debt consolidation companies can cause your payments to your creditors to be late which would cause your scores to go down. But being in bankruptcy will definitely impact your credit scores - and this includes a Chapter 13 bankruptcy.
Here have been some non factors when it comes to your credit score. You could also consider these things myths - myths of things that impact credit scores. More information on improving your credit score before you shop for a home loan.
