The first step in learning to responsibly manage your credit score is to understand exactly which items affect it and how. Commonly asked questions about credit scores include:
- Do utility bills impact my credit score?
- Does paying my rent on time impact my credit score?
- What about insurance payments?
There’s a lot of confusion out there about how certain payments impact scores, so we set out to answer those questions in this post entitled “Does that impact my credit score?” Take a read, and if you have any other questions, feel free to contact Mariner Finance and ask! We’re here to help.
Explanation: Your age does not impact your credit score. It is worthy to note that the length of open credit does impact your credit score. The longer you’ve had credit open, the better your score. So, generally speaking, while age does not directly impact your score, older individuals usually have longer standing lines of credit which do have a positive impact.
Explanation: Like age, income does not directly impact your credit score. However, the more income you make, the more money you will likely have to pay down bills. The better you pay your bills, the better your credit score. So, it is key to establish responsible spending habits.
Child or Family Support
Explanation: Child support payments or family support payments do not impact your score unless you don’t pay them and a collection agency gets involved. Collection activity does negatively impact your credit score.
Explanation: While your credit score is something an insurance company may use when deciding on coverage, insurance payments do not impact your credit score. Even if they remain unpaid, your policy is likely to be cancelled rather than going to collections.
Utility Bills and Cell Phone Bills
Explanation: Your credit score is not positively impacted by timely payments on your utility and cell phone bills. These companies do not regularly report your payment history to the credit bureaus. However, if you are past due and are sent to collections, they can negatively impact your credit.
Explanation: Most likely, no. Paying your rent on time doesn’t favorably impact your credit. Not paying rent and being evicted can impact your credit and the ability to get a new lease, though. Certain bureaus also have services that landlords report to. For example, Experian has a product called RentBureau which property owners/managers, electronic rent payment services, and collection companies send in updated rental payment history data.
Explanation: Paying your medical bills does not positively impact your credit. Not paying your medical bills and being sent to collection does, however. For a detailed explanation of exactly how medical bills impact your credit, read this blog which gives a more in-depth look at exactly how medical bills affect your credit and recent changes around their impact.
Closing a credit card
Explanation: Many people think that closing a credit card will positively impact their credit. However, closing a credit card can decrease your overall credit available. Credit scores are affected by debt utilization, or how much of your available credit you have used. So, if you have less credit available, your utilization can go up, which could negatively affect your credit score.
Business Credit Cards
Explanation: If you are the primary account holder on your business credit card, and you pay late, it will negatively impact your personal credit even if the card is for your business.
Checking your credit yourself
Explanation: If you are inquiring about your credit score from a reputable source like AnnualCreditReport.com, it is logged as a soft inquiry and will not negatively impact your credit score.
Explanation: There are rumors that credit counseling could be just as bad for your credit score as bankruptcy. While credit counseling may show up on your credit report, it does not negatively impact your score.
Paying cash and using bank cards and checks
Explanation: Many people assume that by always using cash and not taking advantage of credit cards, they have a better credit score because they are not using credit cards irresponsibly. However, lack of credit history can be viewed as even risker than having credit history. Lenders want to see that you are using credit and managing it well.
Explanation: The IRS will absolutely report tax liens to credit bureaus. In fact, if left unpaid, this record can remain on your credit report for 15 years; that’s longer than bankruptcy.
Explanation: Incorrect information can hurt your credit score. Sometimes, people with a common name will find inaccurate information on their credit report. It is important to check your own credit from time to time and correct any mistakes you see.
This material was prepared for general distribution. Although all blog posts are intended to be accurate, the information and third-party links provided in the Mariner Finance’s blog are intended for general knowledge and educational purposes only without any warranties, implied or express, of any kind. The posts do not constitute investment, financial or other advice. Authors may or may not be licensed financial professionals; for specific advice, seek the input of a licensed and trained financial expert.
†We offer personal loans from $1,000 to $25,000, with loans terms from 12 to 60 months. Minimum and maximum amounts dependent on an applicant’s state of residence and the underwriting of the loan. Loans between $1,500 and $15,000 may be funded online. Loans greater than $15,000 or less than $1,500 are funded through our branch network. Specific interest rates and fees are determined as permitted under applicable state law and depend upon loan amount, term, and the applicant’s ability to meet our credit criteria, including, but not limited to, credit history, income, debt payment obligations, and other factors such as availability of collateral. Not all rates and loan amounts are available in all states. Additional fees may apply to some loan offers; some state required and/or permitted fees may be treated as prepaid finance charges. Any such charges shall be in addition to the loan amount requested and/or approved and shall be fully disclosed to the applicant on his/her loan agreement. Not all applicants will qualify for the lowest rates or larger loan amounts, which may require a first lien on a motor vehicle not more than ten years old titled in the applicant’s name with valid insurance. Our loan by phone and online closing process requires a compatible mobile or computer device on which you can access your email and electronic documents. Not all loan types are eligible for loan by phone or online loan closing.
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. As a result, under our customer identification program, we must ask for your name, street address, mailing address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver's license or other identifying documents.
*The process uses a “soft” credit inquiry to determine whether a loan offer is available, which does not impact your credit score. If you continue with the application process online and accept a loan offer, or are referred to a branch and continue your application there, we will pull your credit report and credit score again using a “hard” credit inquiry. This “hard” credit inquiry may impact your credit score.