You probably know that having an excellent credit score can lift your financial life. It provides you with an opportunity to borrow money at low interest rates which helps you to save substantial amounts of interest on credit cards and other loans.
An excellent credit score will also make you pay lower premiums for home and car insurance and impress potential employers who review your credit history as part of the hiring process.
Although it is critical to focus on improving your credit rating, it is also essential to know what helps and what doesn’t help so that you don’t sweat over some things that will not affect your score.
Read on to find out some of the surprising things that won’t affect your credit score.
Your Income
All the credit bureaus in Canada do not consider your occupation, employer, and how much you earn when determining your credit score. They also don’t bother about your current job title, how long you have been working in a specific company, or your overall employment history.
While it is essential to understand that these factors don’t impact your credit score in any way, don’t forget the fact that many lenders out there might consider such information while determining your creditworthiness.
For instance, lenders will want to know your employment history and current salary to determine whether they should approve your loan request or not.
Pulling Your Own Credit Report
A lot of people are always afraid of pulling their credit report for fear that it will damage their credit score. However, you need to keep in mind that when you request for your credit report, it will result in a soft credit check which doesn’t affect your score.
The only time that a credit pull can affect your score is when you apply for a bad credit loan in Montreal or credit card. A soft credit check will never damage your score no matter how many times you pull it.
Rent Payments
Private landlords don’t have access to credit bureaus in the country, and even the large rental companies won’t report your rent payment history to the credit bureaus unless you have a substantial rent balance or damage the house at the end of your lease period.
Therefore, if you are withholding your rent payment because you are in dispute with your landlord or you have broken the lease, such information will never appear on your credit report unless the landlord takes you to court.
Such a disagreement can only affect your ability to rent in another place since landlords tend to ask for references from prospective tenants.
Overdrafts
Your credit score may take a hit if you miss a student loan or credit card payment. It may also suffer if you fail to pay your electric or telephone bill on time. But, if you overdraw your checking account, that overdraft won’t be reported to the credit bureaus.
Paying Small Businesses
The bills that you pay to individuals or small companies for local services such as pest control, rent, landscaping, or lawn care typically don’t appear on your credit report.
Credit bureaus in Canada have strict requirements about who can report financial information to them and in most cases; it isn’t feasible for such small business.
If any company doesn’t report your payment history to the bureaus, then your payment history with that business can’t affect your credit score.