Budgets and Money

Three Things From Your Personal Budget That Won’t Affect Your Credit Score

Several factors impact your credit score. But there are some things that do not affect your score, such as certain personal information, old credit information, and payments to your utility company.

Personal Budgets and Credit Scores Work Together - But Not Always

It may seem that we live, breath, and die by our credit scores. While that may be an exaggeration, the fact remains that our credit scores play a critical role in our personal budgets and overall financial lives.

From a  home mortgage loan to financing a car, as well as deposits on an apartment and utility bills, credit scores dictate so much of what we'll have to pay for so many everyday essentials. But while there are many things on a credit report that can affect your credit score and consequently, your personal budget, there are certain things that aren't. The following are three things that you won't find on your consumer credit report.

Certain personal information.

While your credit report may contain a lot of information about you, it doesn't contain certain personal information such as your race, gender, religion, political affiliation, criminal record, or if you are currently or have at one time received any type of financial assistance. This is considered personal information and does not affect your credit score.

Credit information from way back when.

Most old credit information won't continue to materialize on your credit report. For example, bankruptcies that are 10 years old and most charge-offs that are seven years or older, typically will no longer have impact your score.

Utility payments.

Payments for utility services such as telephone, water, electric, cable, etc., are generally not reported to the national credit bureaus by most utility companies. So while paying your monthly utility bills on time each month is a good way to ensure that the lights will turn on, your financial diligence won't improve your credit score. However, should you become delinquent on your account and are sent to collections, utility companies may report your defaulted account to the credit bureaus, which will have a negative impact on your credit score.

For more information on creating a personal budget, as well as tips for managing your finances, visit the Protective Learning Center.


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