Many wonders if their salary appears on their credit report. The answer is “no”.Salary on Your Credit Report is not part of your credit report. Understand that even though lenders often factor in your income into their lending decisions, they typically get that information directly from you during the credit application process. That is because it is not a part of your credit report and income is not considered by credit scoring systems that use only your credit history.
What then is Included in Your Credit Report?
A credit report is a record of your history of managing and repaying debt. It acts as the basis for your credit scores and is one of the tools that lenders, as well as other companies, use when deciding whether to do business with you and on what terms.
Credit reports are maintained by three major credit bureaus which are Experian, Equifax, and TransUnion. They compile information on how and when you pay your bills, how much debt you have, and how long you have been managing credit accounts. The information that your credit report will typically consist of includes:
This includes your name, recent addresses, current and past employers, as well as names of anyone with whom you have jointly applied for credit.
This includes your open and closed loans and credit card accounts. Now, the length of time your accounts remain on your report depends on how you have managed them and other factors.
Inquiries here mean companies’ requests for your credit report or credit score. They remain on your credit report for two years.
Where you have filed for bankruptcy before, the details will appear in this section of your credit report. It will remain here for seven or 10 years depending on the type of bankruptcy.
Why Lenders Would Ask for Your Information
Lenders mostly factor your income into their lending decisions. Under the Credit CARD Act of 2009, they are legally obligated to do so in most cases. They will typically ask about your income on credit applications and may require proof, in the form of a pay stub or tax return, before finalizing lending decisions.
At other times, creditors ask for proof of employment and the name of your employer on credit application also. When this happens, the names of past employers may pop up in the personal information section of your credit report. Just like other items in the personal information section, those employers have no bearing on your credit standing or credit scores.
Does Income Affect Your Credit Score?
Your credit scores are calculated using the information in your credit report and do not consider your income as a factor. The following factors are what influences your credit score:
Payment History (35%)
Your credit payment history is a big factor when determining your FICO scores. Lenders want to know if you are in the habit of paying your bill on time.
Amounts Owed (30%)
This is the amount you owe on credit accounts, like installment loans and credit cards as well as the percentage of your available credit that you are using which is known as your credit utilization rate.
Length of Credit History (15%)
This accounts for how long you have had your oldest and your newest accounts. The average age of all your accounts are also considered and how long it’s been since you’ve used certain accounts.
Credit Mix (10%)
FICO scores also take into consideration your mix of different credit accounts, even though it is not a key factor. These can include credit card accounts, mortgage loans, and auto loans.
New Credit (10%)
This refers to new credit inquiries and recently opened accounts that can influence your FICO scores.