November 21st, 2011

Do You Know What’s NOT In Your Credit Score?

26 Comments | Twitter | |

credit scores

Most all of us rely on credit at some point in our lives. While you may already know your credit is checked when applying for a loan or credit card, it may have also been checked when you signed up for a new cell phone plan, applied for a new apartment, or opened an account at a credit union.

Since credit affects so much of our adult lives, it’s important to know what factors go into your credit score, including open credit card utilization, percentage of on-time payments, number of derogatory marks, average age of open credit lines, total number of accounts and total hard credit inquiries. (Read more about these six factors here.)

It’s also important to understand what’s not in your credit score, especially since there are many misconceptions. Here’s a quick run-down of the factors that don’t affect your credit:

    Ethnicity
    Gender
    Religion
    Marital status
    Age
    Salary
    Occupation
    Employer
    Employment history
    Where you live
    Interest rates
    Payday and pawn shop loans
    Child support payments
    Rental agreements
    Participation in credit counseling.

Isn’t it comforting to know that your creditors can’t discriminate against you due to your race or gender? And that they can’t judge your creditworthiness based on your occupation?

Ch- Ch- Ch- Changes!

Even though your credit report will probably remain independent of most of the above factors, there are some changes brewing, particularly when it comes to mortgage lending.

In order to better assess a consumer’s creditworthiness, some scoring companies will begin providing an additional score especially for mortgage lenders, according to the Los Angeles Times. This score, offered by FICO, will incorporate the following previously unavailable factors:

    Payday loans
    Evictions
    Child support payments

In the near future, more information could be factored into these scores, such as the status of your utility, rent and cell phone payments.

But FICO’s not the first scoring company to incorporate more data into their scores. Experian, Equifax and TransUnion have started providing estimates of consumer income on credit reports, and Experian this year has started including positive data on rental payments in its reports.

For lenders, these changes mean that credit scoring models are becoming even more predictive of consumer financial behavior. For consumers, it means we have to be more cautious with actions that previously seemed unrelated to credit scoring; taking out one payday loan could soon mean the difference in being approved or denied for a mortgage.

The Future of Credit Scoring

For now, these new factors are minimal and limited. For instance, the updates in FICO’s scoring will only be available to mortgage lenders, and, for now, Experian only reports positive rental data. In other words, your missed rent payment doesn’t affect your Experian credit score.

But these changes could signal more drastic ones to come. In the future, your credit card issuer may be able to see what your interest rates are on each of your lines of credit. Or your auto loan lender might see whether or not you’re making child support payments that could make it difficult for you to also make auto loan payments.

Your Next Move

In light of these changes, don’t change a thing. That may seem counter-intuitive, but it’s true; stick to the tried-and-true good credit health moves:

These smart moves won’t steer you wrong, no matter how credit scoring changes. Keep on top of your credit report by checking your free credit report card often.

Have a Karmic day,

Bethy Hardeman, Social Media Maven

Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.

26 Comments

  1. I have a reported address on my profile where I have never lived. Is that a problem?

    Robert Terry Jones at 5:41 am on March 2, 2015
  2. Mike

    Thanks for your question, Robert. I can’t tell you 100% whether this is a problem or not, but I can suggest some further reading. Check out this article to get started: https://www.creditkarma.com/article/update-personal-information-credit-report

    Thanks!

    Mike at 9:20 am on March 2, 2015
  3. On my credit report! My name is only Linda wilson, Linda Larson , Linda Olivarez!
    I don’t have a Bank America account open at all!

    Linda Olivarez at 6:51 pm on March 3, 2015
  4. Mike

    Thanks for your comment, Linda. If you have any incorrect names on your report, you could contact the bureau for more information. You can find out more about that here: https://www.creditkarma.com/article/update-personal-information-credit-report

    If your report is showing accounts that you don’t actually own, you could also potentially file a dispute regarding that information. You can read about that here: https://www.creditkarma.com/article/dispute-credit-report-errors

    Mike at 9:38 am on March 4, 2015
  5. how when you applying for apartment do they know you have been evicted before

    wanda odell at 9:22 am on March 5, 2015
  6. Mike

    Good question, Wanda. You can read more about what a landlord may see when you apply for a new apartment here: https://www.creditkarma.com/article/low-credit-score-apartment-search

    Thanks!

    Mike at 5:16 pm on March 5, 2015
  7. If there are names on my credit that is not mine or spelled wrong cang i have those creditors removed?

    Gwendolyn Rushing at 7:26 pm on March 28, 2015
  8. Jenna

    Hi Gwendolyn,

    You may not be able to dispute spelling errors, as the bureaus could find your dispute frivolous. However, you can dispute accounts that aren’t yours. You can learn how to do so here: https://www.creditkarma.com/article/dispute-credit-report-errors

    Jenna at 9:36 am on March 30, 2015
  9. My ex-husband’s address several states away shows on my credit report. Besides embezzlement when we were married. Potentially, he continued to use fraudulent information for credit under my name. Is that why his address shows in my history? How would that affect me?

    Alicia LaBrecque at 1:25 pm on April 7, 2015
  10. Mike

    Thanks for your question, Alicia. While I can’t tell you specifically what’s going on in your situation, I can point you to some general info about wrong addresses on credit reports. You can find that here: https://www.creditkarma.com/article/update-personal-information-credit-report

    Mike at 2:38 pm on April 7, 2015
  11. HOW CAN I REMOVE AN OLD MARRIED NAME FROM MY CREDIT? WE HAVEN’T BEEN MARRIED IN 23 YEARS?

    REGINA at 7:01 am on April 10, 2015
  12. Mike

    Thanks for your question, Regina. You can learn more about the personal information on your credit report, and what your options are, here: https://www.creditkarma.com/article/update-personal-information-credit-report

    Please let me know if you have any other questions! Thanks!

    Mike at 9:21 am on April 10, 2015
  13. My ex husband’s job from 9 years ago is listed on my acnt. How do i remedy this. I would prefer not to be associated with his credit.

    Analisa Moreno at 8:37 pm on April 18, 2015
  14. Mike

    Hi Analisa – Thanks for your question. You can find out more about incorrect personal information on your credit report here: https://www.creditkarma.com/article/update-personal-information-credit-report

    Mike at 11:07 am on April 20, 2015
  15. I need to update employers how?

    dan at 6:08 pm on April 25, 2015
  16. Mike

    Hey Dan – Thanks for your question. You can find out more about the personal information on your credit report, and how to update it, here: https://www.creditkarma.com/article/update-personal-information-credit-report

    Thanks!

    Mike at 12:01 pm on April 28, 2015
  17. It has Rachel Carner as one of my names and that’s incorrect

    Rachel Varner at 7:40 am on May 6, 2015
  18. Enola Guerrero

    Hi Rachel – If you are seeing this on your Credit Karma account please contact our agents here: https://www.creditkarma.com/about/contact

    Enola Guerrero at 12:24 pm on May 6, 2015
  19. theyre are 3 addresses listed on here that i know NOTHING about. someone stole my identity and i want to know how to get the addresses off how do i do that

    amber at 10:15 am on May 23, 2015
  20. I see that on my trans union account that in the employer reported section it is listed that I worked for the Elmont School District in 12/6/12 as well as Oppenheimer Funds on 3/2/12.I NEVER worked for them!Is this a problem & how can I correct this?

    Alan Begun at 4:26 pm on May 23, 2015
  21. My report has a wrong name” on it.Robert r echols is incorrect

    Robert echols at 7:36 am on May 24, 2015
  22. Enola Guerrero

    Hi Amber – If you are seeing errors on your report, please go here to steps on how to proceed: https://www.creditkarma.com/article/dispute-credit-report-errors

    Thank you!

    Enola Guerrero at 10:17 am on May 26, 2015
  23. Enola Guerrero

    Hi Alan – To fix any errors you see on your report, please refer to this page on how to proceed: https://www.creditkarma.com/article/dispute-credit-report-errors

    Thank you!

    Enola Guerrero at 10:22 am on May 26, 2015
  24. Enola Guerrero

    Hi Robert – Please proceed to this page on how to correct any errors you see on your report: https://www.creditkarma.com/article/dispute-credit-report-errors

    Thank you!

    Enola Guerrero at 10:22 am on May 26, 2015

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