Highlights:
- Some actions may affect your finances, but won't change your credit scores.
- Getting married or divorced doesn't directly affect your credit scores.
- Seeking help from a credit counselor will not impact credit scores.
You may already know that certain behaviors — such as paying your bills on time, every time — can reflect positively on your credit scores. But it's also important to know that not every action will directly impact your credit scores, either positively or negatively.
The following items may influence your finances, but they generally won't have any effect on credit scores:
1. Paying with a debit card
Using a debit card, rather than a credit card, to pay for items typically won't impact your credit history or credit scores. When you pay with a credit card, you're essentially borrowing the funds to pay back later. With a debit card, you're using money you already have in an account. No borrowing is involved.
The same is true for prepaid debit cards, which you can buy with a dollar amount already loaded onto the card. Prepaid debit card activity generally does not appear on credit reports from the three nationwide credit reporting agencies.
2. A drop in salary
A salary cut may affect your personal and financial life, but won't directly affect your credit scores. While your income generally isn't a factor used to calculate credit scores, it's important to note that some lenders and creditors may consider your income when evaluating a request for credit. They may also check your debt-to-income ratio, or your amount of debt compared to your income.
Also, a drop in income can hurt your credit scores if it results in late or missed payments on your credit accounts. Payment history is typically used to calculate credit scores.
3. Getting married
Your marital status is not a factor used in calculating credit scores. If you get married, you'll still have your own credit reports, and so will your spouse.
That said, if you and your spouse open joint credit accounts, they will appear on both of your credit reports. And late or missed payments on those accounts can negatively impact credit scores.
4. Getting divorced
Actually filing for divorce doesn't directly impact credit scores, but if you have late or missed payments on accounts as a result, it may negatively impact credit scores. In community property states, property — and debts — acquired during the marriage are generally owned equally by both spouses. That means you and your spouse may both be responsible for any debt you incurred while you were married.
While a divorce decree may give your former spouse responsibility for a joint account, that doesn't let you off the hook with lenders and creditors. If your name remains on an account, late or missed payments reported to credit agencies may negatively impact credit scores.
5. Having a credit application denied
A denial of a credit application won't affect credit scores. But the application itself may result in a hard inquiry, which may negatively impact credit scores. If you get rejected by several lenders, there may be common factors in your credit history that drive those decisions.
6. Having high account interest rates
Interest rates and annual percentage rates (APRs) on your credit accounts aren't factors used to calculate credit scores, but late or missed payments on those accounts can hurt your credit scores.
7. Getting help from a credit counselor
There are many credit scoring models, and they generally don't consider whether you are participating in a credit counseling service. But actions you take as a result of the counseling can impact credit scores — for better or for worse.
Regularly checking your credit reports is one way to keep track of your credit accounts and know what information is being reported by your lenders and creditors — and potentially factored into your credit scores. You can access a free weekly credit report from each of the three nationwide credit agencies through www.annualcreditreport.com. You can also create a free myEquifax™ account to receive multiple Equifax® credit reports each year. In addition, you can click "Get my free credit score" on your myEquifax dashboard to enroll in Equifax Core Credit™ for a free monthly Equifax credit report and a free monthly VantageScore® 3.0 credit score, based on Equifax data. A VantageScore is one of many types of credit scores.
