When checking your application for a credit card or a loan, most lenders will assess your creditworthiness, or your likelihood of paying back what you borrow, by looking at your 3-digit credit score.
While there are various scoring models lenders choose from, most use the FICO credit scoring model by Fair Isaac Corp. to measure consumers' risk. FICO scores range from 300 to 850, or from very poor credit to excellent credit.
Wherever your credit score falls, it's worth noting what can make your score go up or down. But you also should understand what doesn't get considered into your score's calculation at all.
Below, CNBC Select lists the 12 factors FICO ignores when calculating your credit score.
What doesn't impact your credit score
Here's what's not included in your score, according to FICO.
- Your race, religion, sex, marital status or any disability you may have
- How old you are
- Your job and how much money you make
- Any public assistance you receive
- Where you live
- Interest rates on your credit cards or other loans
- Any child support obligations you have
- Whether you're in credit counseling
- Requests you or your employers have made to see your credit history
- Information that hasn't shown up on your credit report yet
- Information that has rolled off of your credit report
- Any other information that is not applicable to credit or that doesn't show how you would use credit
What actually impacts your credit score
It's reassuring to know that your age and your salary won't determine whether you have agood or bad credit score, but you should still know what lenders will see when they evaluate your risk.
These factors include your payment history, your outstanding balances (or your credit utilization rate), your length of credit history, how frequently you apply for new credit and the variety of credit products that you have, such as a mix of credit cards, a mortgage, a car loan, etc.
If you are working your way toward better credit, know that there are cards to help you do that. For those struggling to get approved for a credit card, the OpenSky® Secured Visa® Credit Card doesn't run a credit check, and the Capital One Platinum Secured Credit Card requires a low deposit of $49, $99 or $200, based on your creditworthiness. Those who qualify for the minimum deposit as low as $49 or $99 deposits, can still receive a $200 credit limit (which most secured cards offer but with a higher deposit upfront).
Once you get approved for either of these cards, ensure you pay off your balances each month on time and in full to be on your way to a better credit score.
Click here to view the Cardholder Agreement for the OpenSky® Secured Visa® Credit Card.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
FAQs
Where you live. Any interest rate being charged on a particular credit card or other account. Any items reported as child/family support obligations. Child support and family support accounts do not impact your FICO Score because these accounts are bypassed from the score calculation.
What do FICO scores ignore? ›
Religion, National Origin, Race, Color, Sex, Marital Status, and Receipt of Public Assistance. Certain information is off limits for credit score consideration under U.S. federal law.
What factors do credit scores often ignore? ›
Factors that don't affect your credit score
Rent and utility payments: In most cases, your rent payments and your utility payments are not reported to the credit bureaus, so they do not count toward your score. The exception is if you use a rent-reporting service or if you are late on utility payments.
Which factor does not affect your credit score answer? ›
Your credit score won't be impacted by how much money you have in the bank or in your investment portfolio. Additionally, an inactive savings account with a negative or zero bank balance has no impact either.
What factors are considered in the calculation of the FICO score? ›
The main categories considered are a person's payment history (35%), amounts owed (30%), length of credit history (15%), new credit accounts (10%), and types of credit used (10%). FICO scores are available from each of the three major credit bureaus, based on information contained in consumers' credit reports.
Which of the following is not a factor in determining your FICO score? ›
Explanation: The factor that does not affect your FICO score is d) paying cash for all purchases. The FICO credit scoring model evaluates several facets of your credit history, like the type and amount of debt you have (such as credit cards, personal loans, or mortgages), and your repayment history.
Why is my FICO score not accurate? ›
As long as the information on your credit report is accurate, your score will also be accurate. The only time your score may be inaccurate is if there is an error on your credit report, which you'll need to challenge to request to have it removed or corrected.
What factor is not considered in the FICO credit scoring system? ›
Other types of scores may consider your age, but FICO Scores don't. Your salary, occupation, title, employer, date employed or employment history. Lenders may consider this information, however, as may other types of scores.
What is not a factor in calculating credit score? ›
Interest rates and annual percentage rates (APRs) on your credit accounts aren't factors used to calculate credit scores, but late or missed payments on those accounts can hurt your credit scores.
What are credit scores not influenced by? ›
Factors that do not influence your credit score are: Race, color, religion, national origin, sex, or marital status.
What's in my FICO® Scores? FICO Scores are calculated using many different pieces of credit data in your credit report. This data is grouped into five categories: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%) and credit mix (10%).
How is a FICO credit score calculated quizlet? ›
FICO score is a type of credit score that has 5 components. 35% make up payment history, 30% make up how much you owe, 15% makes up the length of credit history, 10% makes up the credit mix and the other 10% makes up your new credit.
Can you calculate your own FICO score? ›
It's impossible to calculate a credit score yourself, but you can monitor your score for free—and the general factors that promote good scores are well known and worth understanding.
What components are not included in your FICO score? ›
Your race, color, religion, national origin, sex and marital status. US law prohibits credit scoring from considering these facts, as well as any receipt of public assistance, or the exercise of any consumer right under the Consumer Credit Protection Act.
What negatively affects FICO score? ›
Late or missed payments. Collection accounts. Account balances are too high. The balance you have on revolving accounts, such as credit cards, is too close to the credit limit.
What makes my FICO score go down? ›
Scores are determined by formulas, and things like paying off a loan, having your credit limit reduced or closing an account can result in a lower score, as can a credit card balance that is higher than normal for you.
Which FICO score matters the most? ›
The FICO credit-scoring model has been updated over the years, resulting in multiple versions of the score. FICO Score 8 is the most commonly used. But the version may vary by lender and credit product, like applying for a credit card versus financing a car.
