Most people know that having a good credit score is key to getting the best credit cards and loans at good interest rates. However, although the credit score is integral to one’s financial standing, not too many people know what makes up the score, how to check it, or how to improve it. Given this, we’ve listed some surprising facts you may not have known about credit scores.
- Credit Scores Did Not Exist Till the 1950s: Before credit scores came into being, you would have to meet a banker to get a loan. If the banker didn’t feel you were trustworthy or didn’t like you, your loan application wouldn’t be approved. It was only in the 1950s that credit scores (more precisely, FICO scores) were founded by Earl Issac and Bill Fair.
- Your Credit Score Could Predict the Length of Your Marriage: The Federal Reserve conducted a study and found that couples who have larger gaps between their scores right at the start of their relationships were more likely to separate. In other words, the closer your score is to your partner’s, the more likely it is that you will stay together.
- Employers Can’t Just Access Your Credit Score: Many people assume that employers can just look up your credit score, and base their hiring decision on the score. This is far from the truth. In fact, if the employer wants to check your credit report, they will need to request your permission. And, even then, what they see is a different version of the report you see.
- Your Degrees and Bank Balance Have No Impact on Your Credit Score: Your education level and bank balance do not affect your credit score. The factors that affect your credit score are all related to payments and debt. Also, your salary, employment status, and stock portfolio don’t impact your credit score.
- You Can Get a Mortgage Without a Credit Score: If you’ve never had credit cards or borrowed loans, your credit score will essentially be 0. But, even if you don’t have a credit score, you may be able to qualify for a mortgage by way of a process known as mutual underwriting. This is when the lender takes all your monthly bills and assets into account, based on which your application is approved.