Pop quiz: Do you know what affects your credit score?

Dave B
  • Credit
  • 7 minute read

You might not pay much attention to your credit score, but that doesn’t mean it doesn’t affect you. The health of your credit can determine some of life’s biggest milestones.

To many of us, credit scores are a mysterious gauge of financial adeptness. We’re not sure what does and doesn’t affect that number.


WisePiggy quizzed 2,000 Americans ages 25 and older through an OP4G survey, asking what specific actions and traits can affect your score. Find out how they did, and see if you know what does and doesn’t affect your credit.

Missing a payment

If you think missing a credit card payment can ding your score, you’re absolutely right. Late payments and delinquent accounts are precisely the kind of info that interests lenders. So missing a payment can definitely affect your score. Nearly 69 percent of respondents answered this correctly. In most age groups, the majority answered this action correctly. Interestingly, however, only 27.55 percent of respondents aged 65 and up believed missing a payment affects your score.

Verdict: Yes.

Where you live

This would be an odd measure of credit, and no, your location has nothing to do with your credit score. Only 14.85 percent of those polled believed that where you live determines your score. Again, there was a large gap between the average percentage and the percentage of older Americans that got this one right. Of those 65 and older, 30.61 percent believed residence location makes a difference in your score.

Verdict: No.

Checking your credit report

This is a tricky one — 31.1 percent of respondents believed that checking your report can impact your score. But that isn’t the case.


When it comes to pulling your credit report, inquiries fall into one of two categories: “hard” or — you guessed it — “soft.” If a lender pulls your report, this is generally a hard inquiry, and it can ding your score a bit. But pulling your own report is considered a soft inquiry. Maxine Sweet, vice president of public education at Experian, recently told WisePiggy that you, as a consumer, can review your own report as much as you like. This is viewed as a soft inquiry and is not scored. The same goes for other inquiries including employment, insurance and preapproved offers, Sweet said.

In our poll, the percentages were pretty similar across the board. About a third (31.1 percent) of those polled got this one wrong.

Every consumer is entitled to one free credit report per year from each of the three credit bureaus — Equifax, Experian and TransUnion — so those 30 percent who think checking their report will harm their score should check theirs today.

Verdict: No.

Outstanding balance versus line of credit

Our respondents were torn with this one. But your outstanding credit balance versus your line of credit most definitely affects your score. This is because of something called your credit-utilization ratio.

This ratio is the difference between how much credit you use and how much you have available. This ratio accounts for 30 percent of your credit score. Generally speaking, the lower your utilization, the better your score.

Half of those polled knew that this does affect your score. But the youngest and oldest respondents were below average on getting this one right. Roughly 40 percent of both age groups (25-34 and 65+) responded correctly.

Verdict: Yes.

Canceling a card

Only 38.8 percent of respondents got this one right. Cancelling a card does indeed affect your credit score. But does that action affect it in a negative or positive way? According to the FDIC, closing a card that you’ve had open for ages can actually hurt your score, if it has a decent payment history. And canceling a card you’ve had for a long time will also diminish the length of time you’ve had credit, another data point that figures in your score.

Respondents in the 25-to-34 age group were least likely to respond correctly to this one. Only 30.73 percent believed closing a card impacts score.

Verdict: Yes.

Opening a new credit card

Surprisingly, only 42.8 percent of the people we polled answered this one correctly. Yes, opening a new line of credit, whether it’s a card or a loan, most certainly affects your score. As we’ve explained before, your score takes a small hit, via a hard inquiry, just for applying. And the young age of your new line of credit can impact your score, too. A big part of your score is calculated using the age of your credit — the older, the better. If you have too many “young” accounts, you won’t get all of the points in this category.

Basically, older accounts make for an “older” credit report, helping your scores. Again, younger respondents (age 25-34) were least likely to answer this one correctly. Only 32.56 percent of them believed opening a new card can affect your score.

Verdict: Yes.

Your income

Nearly a third (32.15) of our respondents believed that income can affect credit. But your income and your credit score have nothing to do with each other. Good news for many of us.

Verdict: No.

Number of accounts you have open

Almost half (46.45 percent) of those polled said that the number of accounts you have open can affect your score. While hard inquiries from credit applications can affect your credit, the mere number accounts you have open shouldn’t hurt you, as long as you pay these accounts on time, keep your balances low, and have a good mix of accounts.

Verdict: No.

How much money is in your savings account

Your savings account balance, like your income, does not directly affect your credit score. The vast majority of people in our survey answered this one correctly. Only 10.75 percent of respondents believed your score is impacted by how much is in your savings account.

Verdict: No.

How often you use your debit card

Your debit card use has no direct impact on your credit score. In total, 90.1 percent of our respondents got this one right.

Verdict: No.

Most people seem to have a faint, but not clear, understanding of what is and isn’t calculated into your credit score. We found that those aged 35-54 seemed to have the clearest understanding of credit, whereas older age groups weren’t sure which actions affect credit. Respondents between the ages of 25 and 34 seemed unsure of how opening and closing cards can affect your score.

Overall, our results highlight the importance of knowing and checking your score periodically. Get your free credit score, then keep tabs on it. Your rating can help you get approved for the best credit cards and nab low mortgage rates. It might not seem to make a difference in your day-to-day life, but when it comes to those big milestones, your score can have a huge impact.