Top Factors That Don’t Impact Your Credit Score

At this point, you already know a good credit score opens doors to favourable fees and interest rates. This goes a long way in saving you huge amounts of money in monthly payments and the overall loan. A good credit will also cushion your finances in other ways such as convincing a potential landlord to rent you an apartment, paying lower premiums on home and car insurance, paying low to zero security deposits for cell phones and utilities.

It’s crucial for you always to maintain a good credit, but you need to know what will help build or destroy it to avoid working too hard on unnecessary factors. In this article, you’ll learn about the various factors that don’t disturb your credit rating.

Calculating your credit score

Before we strike off the things that don’t affect your score, it’s essential for you to understand how they are calculated. There’re many companies that come up with credit scores, but lenders prefer FICO.

Your credit rating and your current or previous employer have no relationship

  1. Your payment history – This will take up the largest share with a whopping 35 percent of the overall score. To improve this element, make sure you clear all outstanding bills and debts on time.
  2. The amount you owe – With a 30 percent share, your credit utilisation comes in second. Maintaining the ratio at below 30 percent will give you an edge.
  3. Your credit history – This looks at how long you’ve had your credit. The longer the better because it means you have some experience in managing debt. It takes up 15 percent of the overall score.
  4. New accounts – If you open numerous accounts within a short time, it could mean you are unable to pay your bills. For this reason, try and spread out your credit applications over some time.
  5. A Mix of credit – If you have various types of credit such as a mortgage, an auto loan and a student loan, then this will show lenders how you can manage a mix of credit. However, make sure you pay all of them on time. It will take 10 percent of the total score.

Now you know how your score is calculated. Let’s dive into what won’t affect it.

Checking your credit reports

Each time you make a loan application, the lender will perform a credit check often called a hard inquiry. These inquiries remain on your report for about two years and will slash no more than 5 points of your total score. However, for people with few credit accounts and short credit history, the hard checks will have a significant impact on the score. Therefore, it’s best if you spread out your loan applications over a period of time to avoid dips in the score.

If you perform your own credit checks, the score won’t take a damaging hit. This is because you’ll be performing a soft check.

However, if you perform your own credit checks, the score won’t take a damaging hit. This is because you’ll be performing a soft check. Financial experts advise keeping an eye on your credit score to spot errors.

The amount you earn

Your score and your current or previous employer have no relationship whatsoever. This is despite your credit report containing this information. In addition, your income doesn’t affect your credit. However, it can determine your ability to repay a loan. You can still have a stellar score even if you live from paycheck to paycheck. Everything will depend on how well you manage your finances.

Your level of education

The same as your income, whether you completed college or went to school in the first place doesn’t affect your credit score in any way. If you didn’t go to school, you still have the same chances of a stellar score as a professor. Everything boils down to how well you manage your finances.

Savings and checking account balances

Your score will reflect how good you are at managing debts. Your bank accounts aren’t included in calculating your credit score. According to finance experts, credit card balances sum up as liabilities while savings and checking accounts are assets. Credit scores and reports will take a look at how you use your assets to take care of the liabilities. As such, your creditors are the only ones reporting to credit bureaus.


By skipping or making late payments on your car loan or credit card, your credit score will suffer. Also, if you don’t pay household bills, your credit score will take a nosedive. However, overdrawing from your checking account won’t land you in problems like a bad report to credit bureaus.

A young woman making her credit card payments in order to keep her credit score intact

Nevertheless, you need to make sure you don’t end up on ChexSystem’s radar. Just like credit bureaus monitor your credit trends, ChexSystems monitors your bank account trends. If you have a habit of overdrawing, you’ll find it difficult to write checks or even open accounts in the future.

Questions on factors impacting your credit score

What affects my credit score negatively?

The primary factor that can always affect your credit score negatively is a poor payment history. Omitting to make payments, for whatever reason, as well as paying off your credit card late, can lead to detrimental effects on your credit report. A poor payment history will remain on your credit report for seven years, affecting your ability to borrow money at competitive rates.

What are the factors taken into account when calculating a credit score?

Some of the most important factors that are taken into account when assessing the health of your credit score are: your payment history, which is the most important factor, as well as the amounts that you currently. The length of your credit history is also a very important factor, alongside your most recent credit applications.

Does making minimum payments hurt my credit score?

Making your minimum payments on a credit account can actually help you increase your credit score. A systematic, positive payment history is what primarily drives your credit score. However, only making minimum payments for an extensive period can have a detrimental effect on your credit score as your credit utilisation would remain high for a long period.

Carrying forward your credit card balance

This is one of the biggest misconceptions peddled around. No, carrying forward your credit card balance from won’t improve your credit score. The amount charged on your credit card does affect your score, but nothing changes whether you decide to pay off the debt when its due or decide to pay the minimum amount. On the contrary, if you roll over your balance, all you do is increase the overall bill courtesy of the accrued interests.

Paying insurance premiums

An affordable insurance will go a long way in securing your finances. This means you’ll have enough money to take care of debts rather than emergencies. Insurance companies will analyse your credit score to determine the risks involved in insuring you.

Insurance companies will analyse your credit score to determine the risks involved in insuring you.

However, delaying your premium payments or defaulting them all together will not affect your credit score. On the other hand, skipping payments will result in the termination of your policy. This will sting in your pocket, but the credit remains untouched.

Paying your rent

For the biggest drawer of finances, it’s quite heartbreaking that on-time rent payments don’t impact your credit score. However, this is set to change thanks to some new players in the game. You can talk to your landlord to join services such as RentTrack and Rental Kharma which will report all your rent payments to credit bureaus, but for a certain fee of course.

Attending credit counselling session

Debt management can weigh you down. Seeking advice from a credit counsellor is a smart move to maintain control. You can talk to a qualified and trustworthy debt counselor, but this won’t affect your credit. However, they’ll set up a repayment plan for you which will show up on the credit report, but this won’t impact the score.

A couple are shown attending a meeting with a credit counsellor

You need to tread with caution when searching for credit counselling services. Numerous scammers waiting to defraud you of your hard-earned money through promises of taking over the payments to creditors while their main aim is to run away with the money.

You can read more on what does debt consolidation do to your credit score, here.

Utility bills

Opening a new account will prompt utility companies to analyse your credit, but they will not report any payment history to any credit bureau. This is unless you become delinquent and the service is stopped. In short, it means that your score won’t rise if you make on-time payments or open a utility account. However, if you skip or make late payments, your score will take a hit.

Your personal information

Credit reports contain personal information such as previous and current addresses, your name, birth date, social security number and records such as bankruptcies, IVAs and recorded lien. On the other hand, it doesn’t indicate your gender, race, marital status, religion or political inclination. These factors won’t affect your score.

Getting into marriage

Your credit score is personal. This means even after marriage; the score will remain private. The scores and histories will not be merged. If your partner has a bad credit, your personal score will not suffer. However, this will kill any ambitions of getting a joint loan.


Now you know how your score is calculated including the factors that contribute to the overall rating. You also know which factors don’t affect your score in any way. This will enable you to focus your efforts on what matters. Maintaining a stellar credit score is in your best interest as borrowing bad credit loan lenders are much more expensive than lenders for people with good credit.

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