What on Earth Doesn’t Affect My Credit Score?

By now, you’re probably well aware of how important your credit score is to your financial well-being and you do your best to carefully dodge all the potential threats to that precious number. Late payments, hard credit inquiries–you avoid them like the plague. It can be exhausting keeping up with it all, so is there anything at all that doesn’t affect your credit score or is every detail of your financial life fated to influence your credit in some way?

Factors that Won’t Affect Your Credit Score

Believe it or not, there are a few things that, while important and closely related to your financial health, aren’t reported to credit bureaus and won’t result in a bad credit score:

Interest Rates

Though the affordability of the interest rates you obtain is based on your creditworthiness–the lower your score, the higher your rates–paying a high interest rate alone will not lower your score. This is also true if you own a high interest credit card. You could have one with a 28% APR, but as long as you pay your bill in full and on time, your credit score will remain intact.

Credit Counseling

You don’t have to be in poor financial standing to obtain the services of a credit counselor, and even if you are, doing so will not have any affect on your credit score. Hopefully, it will do just the opposite by helping you to manage your debts and finances better.

Credit counseling used to be noted on credit reports and FICO scores would factor this into scores, lowering the number when instances of counseling were recorded. However, it was discovered that people were visiting counselors before they experienced financial troubles, so the formula was changed.

Soft Credit Inquiries

It’s a common misconception that any credit check dings your score, but this is not always the case. Yes, applying for 10 credit cards in a week is gong to negatively impact your credit, but a soft credit check by a potential employer will do nothing to your score. Soft credit checks provide limited information to whoever is conducting it and doesn’t count as a full credit inquiry, like one that would be performed by a creditor or lender.

Income

While income partially determines how much credit you are granted, such as a line of credit on a credit card, the number itself has no bearing on your credit standing. You could make $10 a year or $1,000,000–it doesn’t matter.

The only time your income will have an impact on your credit score is when it does not match your spending and you take on debt. It doesn’t matter what your income level is, however. If you spend more than your earn you will see your credit score suffer.

With so many people suffering from debt, foreclosures and unemployment, it’s nice to know there are a few things that won’t impact your credit. Even so, neglecting these areas of your finances could end up negatively influencing your credit score in an indirect way. Practicing responsible financial behaviors like limiting spending, paying bills on time and periodically reviewing your credit report should keep that number healthy.