Ask an Expert: What’s Not Calculated Into My Credit Score?

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Many people believe that a number of situations that are bad for your personal finances -- being unemployed, for instance -- will automatically affect your credit scores. Not so.

This post comes from Jason Bushey, who writes about credit cards daily on

I recently received this question from a Money Talks News reader:

I’m a big fan of Money Talks News and I find the site incredibly helpful when it comes to explaining what’s in my credit score. That said, I’m still sort of confused about what isn’t in my credit scores. For example, the other day my dad mentioned how his credit was “great except for one bounced check years ago.” I told him I didn’t think a bounced check counted against his credit score, but in the end we both sort of left the conversation in the dark.

Can you explain once and for all what’s not calculated in my credit score? — Jess D.

My response

When it comes to something as convoluted as your credit score, there’s bound to be confusion. No matter how much you know (or don’t know) about your credit, situations pop up that have consumers like Jess scratching their heads about whether or not they actually affect scores.

There’s, of course, the example Jess writes about. Let’s clear that situation up first: Per Liz Weston on MSN Money, a bounced check is not reported to the credit bureaus and won’t hurt your scores. However, the bureaus will be informed if you don’t cover the overdraft amount and the debt is sent to collections. If the situation gets that far, it will hurt your credit scores.

Here are some other credit score non-factors:

Your income

Your credit scores really don’t care whether or not you’re employed or, for that matter, what your income is. However, it goes without saying that having no income can make it extremely difficult to keep up with your bills and could increase the likelihood of delinquent or late payments. But there’s no direct relationship between employment and credit scores.

Your age

There’s no direct correlation between your age and your credit score. Of course, someone who is older will have had more time to build a history of responsible credit use, and length of history is a factor in credit scores. However, according to myFICO, age alone is not a factor.

The size of your savings account

No savings account? No problem!

Just kidding (of course). For multiple reasons, including peace of mind, it’s obviously crucial to open and contribute to a savings account or emergency fund. However, having neither will have no direct effect on your credit score. That said, in the event of an emergency it could mean the difference between being able to pay your bills and not.

Paying only the minimum on your credit cards each month

Last but not least, this is another bad idea that, perhaps surprisingly, won’t affect your credit scores.

Let’s be clear: We are not suggesting that you pay only the minimum due on your monthly credit card bill. Paying the minimum means you’re doing very little to pay down your debt, and you’re likely amassing considerable interest payments that make it extra expensive to carry that credit card. That said, paying at least the minimum is crucial to maintaining a solid credit score.

These aren’t the only non-factors that many people believe affect credit scores. It’s good for consumers like Jess to err on the side of caution when it comes to what does and doesn’t affect scores, but in the end the more information you acquire about your scores, the better off you – and your credit – will be.

Stacy Johnson

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