What Influences My Credit Score the Most?

What Influences My Credit Score the Most?

It is helpful to consider the ones that influence it the most so you can target these and improve your personal score. Inquiries are an area that you can easily address. Whenever you apply for credit or a loan, the creditor or lender will do what is called a hard inquiry on your credit report. While one or two of these will not have major impact, a number of them at a time can cost you points in the new credit category. 

Checking your own credit through a consumer service like Credit Karma or by requesting your full credit reports does not harm your score.


Bankruptcy dramatically impacts your credit score, and it can be more damaging than any other single factor. The two types of personal bankruptcy are Chapter 7 and Chapter 13. The primary difference is that a successful Chapter 7 will discharge your debts, while Chapter 13 involves a repayment schedule of from three to five years. 

In both cases, bankruptcy commonly does not fall off of your credit report for seven years after it is completed (though it can remain for up to 10 years). This makes Chapter 13 bankruptcy longer lasting and more damaging as your discharge is delayed by years. 

FICO scores penalize people filing for bankruptcy with stronger credit more severely than those with only average credit. 


Income does not show up on your credit report, so it does not directly impact your credit score. If you apply for credit or loans, the lender will ask your income and use this to figure up your debt to income ratio. 

Your debt to income ratio should ideally be less than 30 percent. 

This is also the percent you should keep as a maximum with your credit usage every month. Higher numbers will cost you in the credit utilization component of your FICO score. 

Car Leasing

Leasing a car will usually not impact your credit score any differently than financing a car in an auto loan. If you make the payments on time every month, it will build or rebuild your credit as the payments get reported to the three credit bureaus.

Paying off a lease early can damage your credit, as the account gets reported as closed to the credit bureaus, something that they misinterpret as having settled a debt for less than you owed on it (even though you will pay more in penalties to close it out early).


Refinancing is another area of which you should be wary. If you pursue cash out refinance, this can have two negative effects on your credit score. First, you are replacing an older loan with a new loan, hurting your average age of credit history FICO component. Secondly, if it is a larger loan, then this will negatively raise your credit utilization ratio. 

Because this utilization ratio comprises 30 percent of your FICO credit score, you should be careful about increasing it through a refinancing. With any refinancing, be careful not to do it too often (which looks like you do not honor your contracts) or to shop around for rates much (which causes multiple hard hits on your credit at once and can cost you points).

Tax Liens

Some good news for you who owe the IRS money is that tax liens no longer show up on your credit reports. Experian reports that this decision was made in 2017, and all tax liens were removed from the three credit reporting bureaus by April of 2018. The result is that tax liens do not any longer have an impact on your credit scores.

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