9 Factors That Have No Influence on Your FICO® Scores
Discover nine factors that do not impact your FICO Scores.
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Having a good FICO® Score can benefit you in many ways. Good credit has the potential to help you qualify for financing, and to receive offers for better interest rates and borrowing terms too. As a result, it's wise to understand the factors that can influence your FICO Scores for the positive or the negative.
At the same time, knowing which details have no influence on your traditional FICO® Scores can be valuable information as well. Read on to discover nine factors that do not impact your FICO Scores.
Personal Information
Details like your name, address, date of birth, and Social Security number may show up on your credit reports with Equifax, TransUnion, and Experian. However, this personal identifying information will not affect your FICO® Scores.
Age
Although your date of birth appears on your credit report, FICO® Scores do not consider your age. Other types of scores, however, may do so.
Income
The amount of money you earn, or changes that take place in your income, do not factor into your FICO® Scores. It's possible to earn an exceptional FICO Score regardless of the size of your income. It is worth noting, however, that a lender may consider your income when you apply for credit.
Employment History
Not only do FICO® Scores ignore your income, but they do not consider your employment history or occupation when calculating your score either. But lenders may use this type of information to decide whether to approve you for financing, and what interest rate and terms to offer you.
Religion, National Origin, Race, Color, Sex, Marital Status, and Receipt of Public Assistance
Certain information is off limits for credit score consideration under U.S. federal law. Not only will the data above never be considered in your FICO® Scores, but lenders are prohibited from discriminating against borrowers based on any of these factors. You can learn more about consumer credit protection laws and your rights in this helpful guide.
Prepaid Debit Cards
Financial institutions do not report information about prepaid credit cards to the credit bureaus. Therefore, using prepaid debit cards won't help or hurt your FICO® Scores.
Credit Denial
Applying for credit and getting denied can be upsetting. Yet you don't have to worry about the denial itself impacting your FICO® Scores. Allowing a lender to pull your credit, however, results in a credit inquiry that does have the potential to affect your FICO Score for up to 12 months. Every credit report is different, but credit inquiries generally have a small impact on your FICO Scores (and sometimes no impact at all).
Credit Counseling
Working with a reputable credit counselor could be beneficial if you need help managing debt, creating a budget, or working on your credit. The fact that you're in a credit counseling program will not factor into your FICO® Scores. However, if the credit counselor advises you to take certain actions (like settling an account for less or closing accounts), those credit behaviors might have a negative impact on your FICO Scores.
Non-Predictive Information
FICO® Scores help lenders make better decisions about who to loan money to based on risk. Therefore, if a piece of credit bureau information is not predictive, developers do not include it in the scoring model.
Bottom Line
Information is powerful where your credit is concerned. If you know that something will not influence your FICO® Scores, it frees you up to focus on more important details like your payment history, level of debt, mix of credit, etc. The more you understand the credit scoring process, the better.
Michelle Black, Founder of CreditWriter.com is a leading credit expert, financial writer, and speaker with nearly two decades of experience. Her work has been featured with major outlets such as Forbes, Reader's Digest, and U.S. News and World Report.