Does Salary Affect Credit Score?

Credit score Q&A: “Does salary affect credit score?”

The short answer is no.  Your salary does not affect your credit score, as it doesn’t even show up on your credit report.

And if something doesn’t show up on your credit report, it won’t have any effect on your associated credit score.

(Credit report vs. credit score)

However, employment history does show up on your credit report, though it doesn’t detail anything about your salary.

It will only display former and current employers, their contact info, and your position at the company.

However, many of these descriptions are often riddled with errors because the information is typically provided by you when you apply for credit cards and other loans.

Your Salary is a Secret

That said, your less-than-stunning salary won’t have any negative (or positive) effect on your credit scores (yes there are three credit scores).

And for those of you bringing in the big bucks, doing so won’t get you any closer to the highest credit score out there (850 for Fico score, 990 for VantageScore).

When it comes down to it, things like race, ethnicity, sex, marital status, employment, and income are not part of your Fico score.

In fact, credit card companies don’t typically verify income, though that’s beginning to change.

There is word that the credit bureaus have gotten in on the “income estimation” business as well, so creditors will be able to get estimates of your income.  However, this still won’t have any bearing on your credit score directly.

It may have the indirect effect of fewer approvals for those with low incomes versus those who make lots of money, but it won’t be part of the any of the credit score providers’ algorithms just yet.

But obviously there’s probably some sort of positive correlation between high salaries and high credit scores, since a major component of credit scoring involves paying bills on time.

In other words, those with plenty of money are probably more likely to pay their bills on time each month, though it’s not a perfect science.

And that’s just one of several factors that determine credit scoring – amounts owed, length of credit history, amount of new credit, and type of credit also come into play.

So make sure you pay bills on time, keep balances low, apply for new credit sparingly, and mix it up a little to ensure you wind up with a good credit score!

Tip: How to raise your credit score.