Things Affecting Credit Scores

7 Things That Don’t Affect Your Credit Score

Your credit score can seem like one of the most ominous of numbers in your life. With a bad credit score, it is something that hangs over your every move. However, there’s no reason to stress in every situation. Here are 7 common things don’t affect your credit score, for better or for worse.

1. Bank overdraft

If you’ve ever suffered from a bank overdraft fee, you know how expensive it can get. This is especially true if you receive many overdraft fees. It can be overwhelming, but the good news is that overdraft fees don’t move your credit score at all. There’s just one important thing to note. You have to ensure that the fees are paid off, so that the fees aren’t sent to collections. Understand though that if the overdraft fee is not paid after many weeks, your bank will send your account to a collection agency. Then, that debt collection itself will hurt your credit score.

2. Paying for insurance

Insurance companies perform a credit check when they decide if they want to give you insurance and when they calculate the insurance premium you pay. But although they’re using your credit score to make a financial decision, they don’t actually report your payments to credit bureaus. So, your insurance doesn’t change your credit score either. So, if you’ve been making timely insurance payments every month without fail, you’re unfortunately not reaping any credit score benefits.

However, much the same as an overdraft, if you missed too many of your insurance payments and the company have to send it to collections after they have canceled your policy, then it does negatively impact your credit score.

3. Paying your phone bill

Much the same as an insurance company, phone providers will look at your credit score prior to offering you a service. These phone providers often don’t give your bill payment history to the credit bureaus. They only want to see how much they should charge you as interest. Your credit score is not aided by timely bills either. So, even if you pay your cell phone bill on time every single month, it will not help your credit score at all.

But of course, like all things, if you stop paying your bills and it has to be sent to collections, the collection agency will report back to your credit score it will cause your credit score to drop.

4. Checking your own credit score

When a company looks into your credit, such as when they verify your credit in order to give you a loan, this inquiry counts against you for the first year. Every time somebody inquires for your credit score, it negatively hurts your credit score. That’s why it’s recommended that you don’t apply for multiple credit cards over the course of one year. On the other hand, you can check your credit score as often as you want. Using a legitimate third-party, you can check your credit score regularly and it won’t drop by a single point.

5. Rent payments

In most cases, your rent does not count towards your credit score. For anyone who doesn’t have a mortgage yet or is trying to repair their credit score so they can get a better loan rate on a mortgage, this might come as bad news. Naturally falling behind on your rent doesn’t hurt your credit score and your ability to get any loan in the future.

Also, you can ask your landlord to report your payments to the Experian rent bureau. This is the only aspect of rental payments which could help you with your credit score. Having this agreement set up online is a very beneficial way for you to build back your credit.

6. Credit counseling

Many people falsely believe that credit counseling affects your credit poorly, just like filing for bankruptcy. This is not true. Credit counseling appears in your credit report as an annotation but it doesn’t actually impact your score. If you are using a credit counselor to manage your credit card payments, just make sure that the creditor is making timely payments. Irony aside, if you have a credit counselor helping you and they make late payments on your behalf it will hurt your credit score.

7. Child support and alimony

Unless you fall behind on your payments and everything has to go to collections, child support and alimony payments do not affect your credit score one way or the other. However, what the other implications are of not providing child support and alimony is another story.

Summary of actions that don’t affect your credit score

Here’s a brief recap of the 7 things that don’t affect your credit score:

  1. Overdrafting your bank account
  2. Insurance payments
  3. Phone bill payments
  4. Checking your own credit score
  5. Rent payments
  6. Getting credit counseling
  7. Child support and alimony payments

For more tips, you can go to one of the best credit repair companies to seek professional help in fixing your credit score.

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