We spend a lot of time on this blog scrutinizing the factors and financial decisions that affect our credit scores, but we realize it’s important to educate consumers what WON’T hurt their credit scores. But as you go down this list, remember that there are different credit agencies and scoring models that treat things differently, and we always advocate paying all of your bills and debts on time. That being said, here are 15 things that WON’T hurt your credit score:
1. Debit cards
Some people get confused because debit cards might have a Visa or MasterCard logo on them, but in fact they have nothing to do with loans and therefore don’t affect your credit score.
2. Income
While you may be asked how much money you make every time you fill out a loan or credit card application to determine your debt-to-income ratio, your income is not reported to the credit bureaus and has no bearing on your score.
3. Where you live or work
Where you live, where you work, and for whom is not a factor in your credit scoring, although you will find that information on your credit report.
4. Your age, race, religion, marital status, or sex
It’s against federal law to consider age, race, religion, marital status, or sex when making lending decisions – and that includes all credit scoring models. One distinction is that the federal CARD Act of 2009 does make it harder for people less than 21 years of age to obtain a credit card, as they were trying to curb rampant advertising and targeting of college kids.
5. Checking your credit report
So many people are reticent to check their own credit report because they’re worried about their score going down, but that’s an absolute myth. In fact, an inquiry made by the consumer is a soft inquiry, and doesn’t factor into their score at all. Side note – you also don’t have to pay for your credit report, as each of the three big credit bureaus, TransUnion, Experian and Equifax, allow you to access a free credit report once a year.
6. Your taxes
How much you owe the Internal Revenue service – and even if you pay your taxes late – won’t damage your credit. However, if you are so delinquent that the IRS files a tax lien, it will wreak havoc on your credit score (and probably your life!)
7. Going to jail
We certainly hope you don’t land behind bars, but it’s worth noting that incarceration has no affect on credit scoring. But remember that civil judgments of any kind – including bankruptcies, judgments, and other liens do show up on your credit report.
8. Public assistance and welfare
Receiving food stamps, disability, welfare, or any other form of public assistance is not reported to the credit bureaus and won’t impact your scores.
9. Paying rent
Sending a big check to your landlord on time the first of every month makes you a responsible tenant – but it doesn’t make your credit score better. However, like many of the items on this list, if you fail to pay your rent and get sued by a landlord or creditor, or the debt is sent to collections, it will show up on your report and sink your score.
10. Utility payments
The same applies for utility payments of electricity, heat, water, etc. – they don’t report to the credit bureaus unless you don’t pay and they go to collections.
The same is true for cell phones, insurance premiums, and other common bills.
11. Your net worth
Your income isn’t reported to the bureaus, and neither is your net worth. That means that you could hypothetically have a million dollars cash in the bank but it makes no difference at all to your credit score (but it will help you immeasurably when applying for new loans!)
12. Shopping for a loan in a short time frame
The credit bureaus realize that when consumers are looking to buy a home, car, applying for student loans, etc. they will most likely “shop around,” filling out applications with multiple lenders to get the best rate and terms. But as long as you do this responsible in short time frames, it won’t hurt your score. That window is reportedly 45-days for the new FICO scoring model, but only 14 days for VantageScore.
13. Small debts
The latest version of FICO doesn’t factor in debts less than $100, and with VantageScore 3.0, even collections less than $250 won’t hurt your score.
14. Bank account overdrafts
Did you bounce a check or overdraft your bank account? Don’t panic because it typically doesn’t affect your credit score at all (unless you were making a loan payment with that bank account, in which case you’ll have a late payment!)
15. Child support and alimony
According to both FICO and VantageScore, any obligation reporting as child or family support does not factor into credit score calculations. But of course you have to pay on time to avoid liens, collections, and your score dropping accordingly.
