Nearly every financial aspect of your life can impact credit scores. Utility companies, banks, lenders as well as potential employers just to name a few, use a credit score or credit history to determine if you are creditworthy and responsible.
Mistakes and errors are bound to be made by every consumer on occasion, but knowing what actually hurts or helps your credit score will assist you with presenting yourself in the very best possible light. The following mistakes do not negatively impact your credit scores:
1. Income. A credit report may contain your employment information but it does not contain information about your salary. A low income will not affect your ability to obtain credit. If you disclose your income to obtain a credit card you typically do not have to worry about it affecting your ability to get approved. But a low income can affect your ability to make payments. If you do not have the ability to keep up with monthly payments your credit score will be negatively impacted.
2. Missed car insurance payments. The insurance company may pull your credit report to make a determination to extend insurance or determine rates but they do not report missed payments to the credit bureaus.
3. Late rent payments. A landlord or property management company will probably run a credit report when you apply for an apartment. But once you begin making rent payments a late rent payment is usually not reported to the credit bureaus. There is an exception for rent payments being reported to the credit bureaus. If your landlord or property management company subscribes to Experian Rent Bureau, late rent payments could end up on your Experian Vantage credit report.
Additionally, in the unfortunate event of an eviction through court action, the credit bureaus look up databases and add that information to your credit reports automatically. Generally the landlord does not report evictions to the credit bureaus.
4. Bank Overdraft. Bank overdrafts can be as much as $35.00 per item and should be avoided at all costs. But bank overdrafts do not hurt your credit score and are not reported to the credit bureaus. However, bank overdrafts can be reported to Chexsystems if they go unpaid for a period of time.
Chexsystems maintains a database about consumer checking account habits. Banks may report your checking account habits to Chexsystems but it will in no way affect your credit scores. On the other hand, should your bank account be closed with a negative balance, that balance can be sent to a collection agency and reported to the credit bureaus.
5. Checking your credit history and scores. Pulling your own credit report and checking your credit scores does not hurt your credit. Checking your own credit registers as a soft inquiry on your credit report. Soft inquiries do not decrease credit scores. Hard inquiries can reduce your credit score by as much as 10 points per hard inquiry.
6. Late cell phone payment. Most cell phone companies will check your credit history to determine whether they will open an account with or without a deposit. If your credit history is less than perfect they may deny service or simply request a deposit to secure the account. But unless you stop making payments and default entirely on your bill, they do not report late payments to the credit bureaus. If your account is sent to collections you run the risk of a negative mark being placed on your credit.
7. Age. Certainly being older is never a mistake. But just in case you were wondering how age affects your credit score, there is no need to worry. Generally your age does not affect your credit score unless you are younger. It’s simple, the older you are the more likely you have a longer credit history and your credit scores may be better than a younger person. Younger people don’t necessarily have bad credit scores, it’s just limited until they begin to establish a payment history with a few companies.