Credit scores were designed to help lenders gauge a borrower's risk of default. That's it. The only information used is what's in your credit report. The formula is particularly affected by:
- Whether you pay your bills on time.
- How much of your available credit you're using.
- How long you've had credit.
- How recently you've opened a new account.
- The mix of credit you use.
Here's what does not go into a score:
- Your income or how much of it goes to pay debt.
- Your net worth.
- Your retirement account balances.
- Your investment returns.
- Your employment history or prospects.
- Whether you live within your means.
- Whether you pay your credit card bills in full each month or carry a balance.