Like many Americans, you are aware of the fact that you have a credit score, and that credit agencies keep track of your financial activity in order to compile a report, which will be used by banks, credit card companies and other institutions to determine your qualifications for loans, credit cards and mortgages. But do you know everything that goes into your credit report? Do you know what DOESN’T go into your report? It is important to know how your financial activities affect your credit score, but it is also important to know what information doesn’t play a part in restoring your credit score.
US law prohibits credit agencies from considering the following information in their credit reports or score calculations:
Race, color, religion, national origin, sex and/or marital status.
There are also prohibitions against using the receipt of public assistance or exercising any part of the Consumer Credit Protection Act in the calculation of your credit score.
While FICO does consider the age of your credit, or how long your credit lines have been open, they are prohibited from using your age in its calculations.
While your salary, occupation, title, employer, date employed or any other employment history, may have an impact on your finances and your ability to repay your loans and credit card bills, none of this information is factored into your credit report. Losing your job, changing employers or getting a promotion may have personal impact on your finances, but as long as you continue to pay your bills on time, your credit score will not be affected.
Likewise, where you live, and the local cost of living are not factored into your credit score.
In general, your credit score reflects your ability to pay your bills on time and the overall health of your credit. However, certain types of bills are not considered when calculating your score. Examples include: child support or rental agreements. While there are certainly other consequences for not paying these bills on time, not paying them will not affect you when you restore credit score.
While your credit score will be affected by requests for your credit, certain types of requests are not included in this. These types include:
Consumer-initiated inquiry:You the consumer check your own credit report in order to maintain your finances.
Promotional inquiries: Companies check your credit in order to “pre-approve” you for an offer (example: credit card company pre-approves you for a low introductory APR based on your credit score.)
Administrative inquires: Lenders review your account when you want to open a new account with them.
Employer based: A new employer checks your credit as part of the hiring process.
You should also keep in mind that while each of your credit cards will count towards your score, the interest rate being charged on a particular credit card or other accounts, is not reported to the credit agencies. One of things you should check when you look over your free yearly credit report, is to ensure the limits of each card are reported, so the correct amount of available credit appears on your report.
If you find yourself in financial trouble, a record of your participation in any kind of credit counseling program, will not appear on your credit score restoration, though hopefully the effects of that credit counseling will begin to appear on your report in terms of improved financial habits and available credit.
Finally, information not proven to be predictive of future credit performance does not appear on your credit report.
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