9 life events that don't affect your credit score
By Allie Johnson
September 24, 2014
You know what kind of behavior can affect your credit score — that late payment you made three years ago, your maxed out credit card and the $10 medical bill you forgot to pay.
But have you ever wondered what doesn't affect your score? Here, credit experts list nine life events that — surprisingly, in some cases — have no direct impact on your credit score:
1. You tied the knot. As far as your credit score goes, it doesn't matter whether you're living the single life or you just celebrated your golden wedding anniversary. In fact, your marital status is not listed anywhere on your credit report, so it can't be factored into your score, says John Ulzheimer, credit expert at CreditSesame.com. Also, although you can have joint accounts with a spouse, there's no such thing as a joint credit report, says Anthony Sprauve, senior consumer education specialist at myFICO.com. However, a late payment or other issue with a joint account affects each person's score, he says.
2. You got divorced. As with being married, divorce doesn't show up on your credit report and has no bearing on your score. However, a divorce can have an indirect impact on your score if you still have, for example, a joint credit card account and your ex maxes out the card or fails to make payments, Ulzheimer says. Experts advise paying off and cancel all joint accounts prior to divorce.
3. You got a promotion. Your new title and fat raise won't boost your credit score, Ulzheimer says, though it could show up on your credit report. “There's still this relic of the past on credit reports called the employment section,” Ulzheimer says. The information listed often is outdated — for example, he says his own previous job is listed as “student” though he hasn't been in school for decades — and doesn't count in your credit score at all, he says. “It would be hard to quantify the value of a job title: Is a reporter for The New York Times better than the branch manager of a Bank of America?” he says.
4. You lost your job. If you just got handed a pink slip, fear not: That won't affect your score either, Sprauve says. However, if you apply for a mortgage, car loan or a credit card, the lender will ask for your employment status on the application, and it will be considered. Sprauve says: “That's why some people get confused and think it's part of your credit score.”
5. You celebrated a milestone birthday. More candles on your cake don't equal a better score — at least not directly, Ulzheimer says. In order for a factor to affect your credit score, it has to appear on your credit report and be predictive of your riskiness as a borrower, Ulzheimer says. Age fits both criteria because research shows younger consumers, as a group, are higher risk borrowers, he says. “But, there's a conscious decision not to consider age,” he says. Instead, your score takes into account the length of your credit history. “Younger people still get penalized because of the age of their credit report,” he says. The good news is it's worth only 15 percent of your FICO score. Ulzheimer says: “It's not going to make or break your score.”
6. You overdrew your checking account. It doesn't matter whether you have $50,000 or negative $50 in your checking account, Ulzheimer says. Your bank account balance does not show up on your credit report or get counted in your score. Even if you don't pay what you owe and the bank closes your account and reports you to ChexSystems — a network where lenders share information about closed accounts — that won't show up on your credit report or impact your score, Ulzheimer says. But if you write bad checks, and those get reported as missed or late payments or get sent to collections, that will affect your score, he says.
7. You moved to a big city. “Whether you live in the city or the suburbs, at the mountains or the beach, it means nothing,” Sprauve says of the relationship of your address to your credit score. In fact, although your credit report reveals a lot about where you live, how often you move and the types of places you live, considering geography in your score could be discriminatory, Ulzheimer says. He adds that factoring in your address would possibly run afoul of the Equal Credit Opportunity Act and raise questions of “redlining,” which is when lenders avoid doing business in certain areas because of the demographics. “That's illegal,” Ulzheimer says.
8. You go for credit counseling. A visit to a nonprofit credit counseling agency will not show up on your credit report or affect your FICO score, Sprauve says. If you enter a debt management plan, however, that will be noted on your credit report but not factored directly into your credit score, says Melinda Opperman, a senior vice president with Springboard, a nonprofit financial education and credit counseling agency. However, the accounts included in the plan will be closed, and that can change your available credit amount and affect your credit utilization ratio, which can lower your score in the short term, she says. But, the plan could help you pay on time and pay down your balances, which can ultimately have a positive effect on your score, she says.
9. You get a DUI. Getting arrested for drunk driving can wreak havoc on your life in many ways, but it won't show up on your credit report, according to Virginia DUI attorney Bob Battle. However, a DUI still can have an indirect impact on your credit score, he says. For example, if you got into a car crash and got sued, any judgment against you would show up on your credit report, Battle says. A judgment typically stays on your credit report for seven years and can affect your score negatively, whether you pay it or not, according to myFICO.com.
Instead of worrying too much about everything that might — or might not — affect your credit score, though, it pays to remember one fact: Your payment history has the biggest impact, at 35 percent of your score, Sprauve says.
“Paying your bills on time is the most important thing,” he says.