What Are The Factors That Do Not Affect Your Credit Score?
Everyone is working so hard to improve their credit score that they waste a lot of time worrying about things that do not even affect your credit score. Concentrate working on things that will improve your score. But to do that you must be able to separate the myths from facts. Given below are 3 factors that do not affect credit score negatively.
Factor 1
Paying off a credit card debt with another one having lower rate of interest affects your score.
This is not a correct fact. Rate of interest does not affect the credit score. However, if your credit score is low, you may have to pay a high rate of interest. Credit card companies and lenders et al do not report the interest that you pay to the three credit bureaus. Therefore, when your score is calculated, it is not considered. In fact, if you pay off a debt, even if it is with another credit card, you will be actually helping your score. One factor that is used to calculate your score is how you use your card. Moreover, when you are paying off a debt with a card having lower interest, you are doing yourself a favor
Factor 2
Your Score is affected when your credit card is cancelled.
This depends upon the number of cards that you have and your debt and credit limit. What this means is that your “debt to credit ratio” is calculated by totaling all your debts and dividing it by the total of your credit limits. But, if you have a single card with no utilization, then there is no chance of this factor affecting your credit score. Since you have not used the card, you have no balance and are not repaying any debt. However, there is one factor that may affect your score. If your card has been in use for a long time, then the length of credit history is cancelled along with the card.
Factor 3
Too Much Credit Will Affect Your Score Negatively.
This is also a factor that is a complete myth. Having balances on your credit cards is not advised, especially if the balance exceeds 30%. Use the card but keep repaying the debt. Being debt free affects score positively. You cannot have too much credit. You can have only too many debts. Also, some people wonder if it would be right to ask the credit card company to lower their credit limit. This is a factor that will surely harm your credit. Therefore, let your credit continue and do not ask the lender to lower the limits.
Work on other factors like paying your bill in time and paying off your debts. These will help to improve your score. Forget about things that do not affect the score negatively.
Samantha Lyttle is a finance expert and a freelance writer. She is a contributor for the site, FreeCreditReportsInstantly.Org.