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 (see rates and fees) 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? ›
FICO scores consider a wide range of information on your credit report, as describes in what a FICO score considers. However, they don't consider: Your race, color, religion, national origon, sex and marital status.
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 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 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 a FICO score? ›
Which of following is not a factor in determining a FICO score? Paying cash for all purchases.
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? ›
Your age. 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 factors do not influence a score? ›
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.
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.
Income. The amount of money you earn, or changes that take place in your income, do not factor into your FICO® Scores.
What factor is not used by FICO to calculate a score brainly? ›
Final answer:
The factor not used by FICO to calculate a credit score is the viewing of your own credit score. FICO's methodology ensures a fair credit decision, focusing on financial history and current debts, not demographic factors.
Which of the following is not a valid FICO credit score? ›
800 - 850 means exceptional FICO credit score. The range of FICO credit score is 300-850. Since 875 is more than 850, therefore 875 is not a valid FICO credit score.
What factors to consider when calculating credit score? ›
Key Takeaways. A FICO credit score is calculated based on five factors: your payment history, amount owed, new credit, length of credit history, and credit mix. Your record of on-time payments and amount of credit you've used are the two top factors.
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.
What are the minimum factors to have a FICO score? ›
Factors That Determine Credit Scores
- Payment History: 35% Making debt payments on time every month benefits your credit scores more than any other single factor—and just one payment made 30 days late can do significant harm to your scores. ...
- Amounts Owed: 30% ...
- Length of Credit History: 15% ...
- Credit Mix: 10% ...
- New Credit: 10%
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.
Is FICO or Experian more accurate? ›
While Experian is the largest bureau in the U.S., it's not necessarily more accurate than the other credit bureaus. The credit scores that you receive from each of these bureaus could be the same, depending on which scoring model they use.
What makes my FICO score go down? ›
Credit scores can drop due to a variety of reasons, including late or missed payments, changes to your credit utilization rate, a change in your credit mix, closing older accounts (which may shorten your length of credit history overall), or applying for new credit accounts.
