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How Does Income Impact a Credit Score?

There is a common misconception that a person with a high income would have a high credit score. This is not necessarily true. No matter if you are an individual on minimum wage, or a millionaire your credit score will depend on how you manage and maintain your accounts. Your credit is dependent upon how you pay your bills, and how much of your credit you are using. Every individual is capable of spending beyond their means and of being irresponsible in how they use their income regardless of how much it is.

Information that measures your wealth is not included on your credit report or score. This can include information regarding assets, savings, investments and retirement. Your income is used to qualify you for lines of credit such as auto loans, credit cards and mortgages. The income information that is used in the process of applying for a line of credit usually comes from the application that you fill out. This is self reported and not generated from the credit report or score.

Income is not included on your credit report therefore it is not used to determine the calculation of your scores. Your score will look into your payment history, amount owed, how long you have had credit, how many new accounts you have, and your mixture of credit in use. This is why it takes time to work up to a high score because of all the factors taken into consideration. Although income is not included on your report you do have to have one to qualify for credit, but don’t have to have a high income to have a high score.

 

 

MSI Credit Solutions provides superior credit restoration and comprehensive consulting services that are reliable and affordable. For any questions or to schedule a free credit consultation, contact us at (866) 217-9841.

 *The information in this article has been provided strictly for educational purposes.

 

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