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Now that you know what, specifically, your credit score means (and how lenders interpret it), it’s important to keep up with what will and will not hurt your credit score. This way, you can spend and borrow more mindfully, as well as push past some common myths surrounding your credit score.


What Will Not Affect Your Score:

Interest rates on current or past loans

Your interest rates are determined based on your current credit score when you apply for a loan or other form of borrowed money. However, your past interest rates will have no impact whatsoever on what your current credit score or future rates will be. They are a reflection of your past score, and nothing more.

Your assets

You could be driving the nicest car or own the largest house but, at the end of the day, lenders will neither be impressed nor swayed by your assets. Otherwise, the credit bureaus do not have access to such personal information, as assets are not factored into your credit score calculation whatsoever.

Checking your credit score

A frequently perpetuated myth that is liable to scare consumers is that their credit score will take a hit every time they check they check it online. This is not true — only hard inquiries (official inquiries conducted by lenders or creditors) will impact your score.


What Will Affect Your Score

The amount of debt you owe

Your credit utilization can negatively impact your score if you’re a heavy borrower. The more money you borrow, the harder it will likely be for you to pay back all of your debt in a timely manner. Thus, you are seen by lenders and creditors as a high-liability borrower, and your score will sink lower than it otherwise would if your overall debt landscape were lower.

The timeliness of your payments

Any time you miss or default on a bill or loan payment, your credit score gets knocked down a notch. As a matter of fact, your payment history is the primary factor used to calculate your credit score, because your history essentially shows how dependable a borrower you will be. The more unpredictable or unreliable your past payments were, the lower your score will be.

Your credit age

Your credit age is regarded similarly to that of your payment history; that is, lenders are trying to determine your reliability as a borrower. The older you history account history — with regard to your oldest account as well as the average age of your combined accounts — the better.


If you have further questions on your credit score and how your daily use of your money affects that number — and thus your ability to successfully borrow at a low interest rate— call Dolaghan Law today at (904) 354-4935! We’re dedicated to empowering your steps to a more secure financial future.

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