Irrelevant Factors in a Credit Score Computation

There are many wrong notions about credit scores. There are people who believe that their area of residence and race affect their score. There are those who believe that several other factors do influence the credit rating that they obtain. This article presents what does not matter in the computation of your credit score.

About one in every six individuals think that their race and gender affect the credit rating that they are given, according to a study conducted by Visa that was released during the previous month. The results showed that many people have mistaken thoughts about their credit scores. Moreover, the results reveal that 42 percent of Americans do not check their scores regularly. But, these thoughts must be corrected and is worthy of understanding because the credit score literally affects your ability to obtain a car or home loan as well as a job, low interest credit card and even a life insurance.

Stacy Johnson, founder of Money Talks News shares some of the biggest misconceptions about credit scores. In the survey that Visa conducted, here are some of the top factors and the number of people who believe that these affect their credit ratings.

1.) Employment History 59.9%

Factors contributing to someone's credit score...

Image via Wikipedia

2.) Debt Interest Rates 58.7%
3.) Age 38.6%
4.) Assets or Savings 53.1%
5.) Nationality 21.6%
6.) Place of Residency 25.3%
7.) English Speaking Abilities or Fluency 21.6%
8.) Race 15.7%
9.) Gender 17.2%

However, none of these factors really have even the slightest impact on your credit score. It would be unethical more so illegal for Fair Isaac, the country’s most popular company that computes for your FICO or credit score, to account for these factors in their calculation.

This however does not mean that work history and income does not matter. In fact they do. They matter more to a landlord and a loan officer. But when it comes to your credit score computation, they are considered irrelevant.

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