Information That Does Not Impact Your Credit Score

The following details may appear on your credit report but are not factored into your credit score calculation:

• Age
• Race, Color, Religion, Nationality, Sex, or Marital Status
• Occupation, Salary, Employer, or Length of Employment
• Home Address
• Interest Rates associated with credit cards or other accounts
• Child Support Obligations and Rental History
• Certain Inquiries, including consumer-initiated or promotional inquiries.

Refrence: myfico.com

Payment History (35% of Your Credit Score)

Your payment history is the most significant factor in determining your credit score. It includes:

• Current Payment Records: Payments on accounts such as auto loans, mortgages, retail accounts, installment loans, and credit cards paid as agreed.
• Public Records: Includes bankruptcies, foreclosures, wage garnishments, liens, and judgments.
• Severity of Delinquency: The length of time an account has been past due.
• Amount Past Due: Balances overdue on accounts or in collections.
• Recency of Delinquency: How recent any delinquent payments, public records, or collections are.
• Number of Past Due or Derogatory Accounts: The total count of accounts with late payments or negative marks.

Payment History Tips

• Pay On Time: Late payments and collections have the most significant negative impact on your credit score.
• Get Current: If you’re behind on payments, catching up and staying current can improve your score over time.
• Be Cautious When Closing Accounts: Closing accounts can lower your credit score by reducing your credit history or increasing your credit utilization ratio.

Amounts Owed (30% of Your Credit Score)

This factor examines how much debt you carry relative to your available credit. It includes:

• Amounts Owed on Revolving Accounts: Credit card balances compared to credit limits.
• Total Amount Owed: The sum of all outstanding balances across all accounts.
• Number of Accounts with Balances: The total count of accounts with outstanding debts.
• Credit Utilization Ratio: The proportion of balances to credit limits on revolving accounts.
• Proportion of Balance on Installment Accounts: How much of the original loan amount is still owed.

Amounts Owed Tips

• Keep Balances Low: Aim to keep your credit card balances below 30% of your credit limit to maintain a healthy credit utilization ratio.
• Pay Down Debt: Reducing balances on credit cards and other revolving accounts is one of the most effective ways to improve your credit score. Avoid simply transferring debt between accounts.
• Avoid Opening New Accounts: Opening new accounts to increase your available credit can backfire and potentially lower your credit score.

Reference: Equifax.com

Length of Credit History

This factor considers:

• Age of Accounts: How long your accounts have been open.
• Number of Recently Opened Accounts: New accounts can temporarily lower your score.
• Time Since Account Activity: How recently accounts have been used or updated.
• Proportion of New Credit vs. Established Credit: The balance between new and older credit accounts.
• Re-Establishing Credit: Activities that demonstrate responsible credit use after past payment issues.

Length of Credit History Tips

• Avoid Rapidly Opening New Accounts: If your credit history is relatively new, opening accounts too quickly can lower your score temporarily.
• Rebuild Responsibly: If you have negative accounts on your report, focus on opening new accounts only when needed and paying them off on time. This will improve your score over time but is not a quick fix.
• Limit Consumer Finance Accounts: Accounts with lenders that specialize in consumers with problematic credit histories can negatively impact your score.

Types of Credit Used (10% of Your Credit Score)

This factor evaluates the variety of accounts in your credit profile, such as:

• Credit Cards
• Retail Accounts
• Installment Loans
• Mortgages
• Consumer Finance Accounts

Tips for Managing Credit Types

• Open Accounts Only When Necessary: Avoid unnecessary accounts to keep your credit profile streamlined.
• Balanced Credit Mix: A general guideline is to maintain three open and active revolving accounts, 1–2 installment accounts, and a mortgage if applicable.

Reference: Myfico.com

• Number of recently opened accounts;

• Number of recent inquiries;

• Time since inquiry;

• Time since account opening;

Credit Inquiries

A credit inquiry will appear on your credit report when your credit report is viewed by an eligible company.

Hard Inquiries

These inquiries affect your credit score. When you apply for a mortgage, auto loan, credit card or other type of account, you authorize the lender to obtain a copy of your credit report. These types of credit inquiries influence your credit score and should be avoided. If you are shopping around for a mortgage, etc.  and you know it would result in multiple hard inquiries, make sure you have your credit history viewed within in a short period of time. Depending on which scoring system you are dealing with, you may have a 15 day, 30 day or 45 day time frame to shop around without significant negative consequences. If all potential creditors review your credit history within the allotted time frame, the scoring system will count these multiple inquiries as a single inquiry.

Account Review Inquiries & Consumer Based Inquiries

These types of inquiries do not affect your credit score. When you choose to observe your own credit report through an online resource, it is considered a consumer- based inquiry and will not affect your credit score. Also, a lot of creditors and collection agencies are authorized to browse your credit report to review your account activity. Credit reports requested by prospective employers will not affect your score as well.

The Fair Credit Reporting Act (click here)