Staying on top of your credit score is important, especially if you’re planning to apply for a home loan
23 March 2020|3 minute read
Your credit score is determined by factors like how well you’ve managed debt and bills in the past, but there are some things that don’t affect your score at all.
Let’s set the record straight on what doesn’t impact your credit score.
Just keeping track of your credit score won’t impact it in any way. Checking your score with a provider like Credit Savvy generates a ‘soft enquiry’. This has no effect on your score, unlike ‘hard enquiries’, which are recorded if you actually apply for credit.
When you’re taking out a home loan, lenders want to know how much you earn. But your income isn’t included in your credit score. It makes sense, after all your salary doesn’t say anything about how well you manage money.
Your credit score is based on your credit history, so it doesn’t include details about what you own. However, a home loan lender will be very interested in your savings, assets and investments as well as any debts you have.
Your credit score can change over time as older information is gradually removed from your credit record. Missed payments for instance, stay on your file for two years; defaults will be there for five years. If you missed a credit card payment a few years ago but have been up to date with each payment since, your credit score could rise.
A variety of factors shape you as a person but they won’t impact your credit score. Your race, gender, marital status, and your religious beliefs will have no effect on your credit score. So embrace who you are without concerns that it could jeopardise your credit score.
Remember, your credit score is generated by looking at patterns in your credit history, characteristics of your credit profile, and aspects of your credit applications.