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Can You Have a Bad Credit Score Even With a Good Income?

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A high income is beneficial to have, and certainly matters when you’re applying for a loan, but your credit score is a little more complicated.

See: 5 Fastest Ways To Boost Your Credit Score
Explore: This Credit Score Mistake Could Be Costing Millions of Americans

The major credit bureaus don’t collect any information regarding your income to determine your credit score. Instead, they look at the amount of credit you have available, the amount of credit you’re using, your repayment history, outstanding debt collections and details on public records like bankruptcy or foreclosure. Lenders look at this information to determine how well you handle credit obligations. The higher the score, the better access you may have to more favorable loan terms.

“The purpose of credit scores is to help assess the risk a person will not pay a debt as agreed — regardless of income,” said Rod Griffin, Director of Public Education for Experian, OppLoans reported. “Understanding the components of your credit report is essential because a strong credit history increases your access to the financial services you need,” he added.

According to OppLoans, FICO doesn’t reveal the exact algorithm for determining a person’s credit score, but these are the factors that determine someone’s credit score:

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