What Won’t Hurt

YOUR CREDIT REPORTS and credit scores are, more than anything, a reflection of how responsible you are in handling your debts. Lenders are quick to report late payments and other issues to the credit bureaus. What about other aspects of your financial life? When it comes to your credit scores, the items that don’t matter are quite surprising:

• Your income and net worth don’t directly influence your credit scores or appear in your credit reports. Your credit reports, however, may list current and former employers.
• Overdrawing your bank account won’t affect your credit scores unless your bank brings in a collection agency to collect the debt.
• Late payments on bills from your insurance company, cell phone provider or local utility typically won’t ding your credit scores, unless you’re being assessed under the new scoring system introduced by Fair Isaac in 2015 and described in the previous section. Ditto for paying the rent late. If, however, you’re really late on a bill and it ends up with a collection agency, your credit scores could take a hit.
• While applying for a loan or credit card can cause a dip in your credit score, there’s no impact if you request a copy of your credit report. There’s also no impact if your employer makes an inquiry or if a lender requests information so it can make a pre-approved credit offer.

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