Things That Do Not Affect Your Credit Score

Things That Do Not Affect Your Credit Score

Your Credit score and your credit report make a massive difference in your life. Get a business loan approved, a new line of credit or an affordable interest rate your credit report and credit score has a huge impact.

Lenders often look into your project report to be convinced to approve a business loan. And even if you are looking for a job, your employer will look into your credit report before he offers you one. It helps them get the idea of how you manage your credit and their debts on time and also how much they can trust you in the future. A regular cibil score check is very essential.

Even your insurance company and utilities will inspect your credit report. If you have a high credit score, your insurers charge you less, while people with low credit scores are charged more.

Although a lot of factors impact your credit score here are few that do not affect your credit score at all

Checking your credit report:

People think that checking the credit report harms their credit score, but there are two types of credit checks: soft inquiries and hard inquiries.

Soft inquiries reviews that are limited up to surface scratching only and do not affect your credit score in any way.

Hard inquiries undoubtedly negatively impact your credit score, and this happens when you apply for a loan or credit card.

Credit counseling:

Sometimes you may need to consult a credit counselor in case you need guidance to free yourself from any debt. Meeting a credit counselor has no impact on the credit score, but the actions you take after consulting your counselor may affect your credit score later.

Your credit counselor will help you with managing your business loan debts by coming up with some practical plans.

Your age:

Your age doesn’t necessarily have any impact on your credit score. Lenders or financing companies do not look into your age, but yes, your average credit score and your period might be correlated.

Your payment history

Your credit utilization

Your credit history length

New credit accounts

Credit mix

If you are making your payments on time, keeping in mind that you use less than 30% of your credit, you can maintain your credit history well because of which you might be able to achieve a good credit score. A good-standing account, opening new accounts only when it is required, maintaining your debts and installments, all add up to an excellent credit score.

Your income:

Your income has no relation to your credit score. Your credit score is something that shows your ability to repay your pending debts on time and also tells how you use your available credit.

Someone with a high income may not be able to use his credits or savings wisely or make repayments on time.

Insurance payments:

Your insurance company will decide whether to insure you or not based on your credit history by checking in to your credit report. If you do not make your payments on time, then negatively affect your insurance policy but has no bearing on your credit score.

Debit Card Use:

We all do possess and keep our debit and credit cards active. By now, many of you are clear on how a credit card can affect your credit score. Unlike is the case for a Debit card. It is general human behaviour in which we wipe out our card from our wallets at every impulse buy opportunity.

Must make a note of this thing that a debit card is not a credit instrument as it comes out from our own funds drawn from the bank. A debit card is a free instrument that you can use. It is not a parameter to judge or manage the debt.

Child Support :

Let us be prepared for all sorts of conditions which may occur in our lives.

We might withdraw money or break our deposit for child support. Another example taken can be of an Alimony. Make such payments won’t affect your credit score. The secret tip for maintaining a good credit score is to make timely payments.

Interest rates:

Your interest rates do not affect your credit score. Having a high credit score will affect your score. Neither will have a low-interest rate to improve your credit score.

However, people with good credit scores can win over with the lenders and succeed in having a low-interest rate loan.

OverDraft :

Overdrawing is one form of creating an overdraft. This will become expensive for you , however it will not have a direct effect on credit score. Please make a note that it is your responsibility to make the clearance on time.

  Insurance payments :

Insurance companies always check your credit score before sanctioning a policy on behalf of your name. Here is a crux. Understand carefully, they check your score, but they don’t report your timely or untimely payments to the credit bureaus. Thereby, we can conclude that the insurance payments will not have a direct effect on the credit score.

In case you are having a record of too many unpaid transactions, the policy will be cancelled. But no balance will be sent to the collections. So, these are some factors that do not necessarily have any negative impact or affect your credit score. One should not believe in myths about these aspects and fear having a low or poor credit score. However, don’t forget to be a legitimate and responsible person. Pay on time, clear on dues and keep a track record on all the little things.  Have a secure and safe financial life without much stress and worries. But it is imperative to have an excellent credit score for both personal and business purposes. A credit score is a pathway to getting loans approved by convincing your lender, availing numerous benefits, costing yourself less, getting charged with a low-interest rate, etc. In order to avail numerous benefits, we need to take timely action.

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