Credit Myth #4: Your Job and Income Contribute to Your Credit Score

After spending over 16 years in the mortgage lending industry I have identified seven myths that consumers commonly hold regarding their credit score.  Over the course of the next few weeks I am going to breakdown each myth and help you better understand how your credit scores are determined so that you can achieve a better outcome for your next loan application.

The fourth myth is that a person’s job and level of income contribute to their credit score.  This is not true.  A person’s job and/ or income are not data points included in the algorithm that determines a credit score.  Certainly higher incomes allow households to better afford their payments and make it less likely they would incur adverse events.  But, at the end of the day a person’s credit score is entirely based on their previous credit behavior.

As THIS ARTILCE points out the information that contributes to a person’s credit score are……

• How length of a person’s credit history
• If they have repaid their loans as agreed
• If they have any missed payments which were 30+ days delinquent
• How they are currently using debt (is the overall level of debt increasing, decreasing, or remaining stable?)
• The mix of different types of credit accounts
• If they have any past derogatory events like bankruptcies, foreclosures, short sales, judgements, or collections.
• If they have recently made other credit inquiries

Please contact me today to learn more about your home loan options.