Does My Income Impact My Credit Score?

You would think that a person with a high income would also have a high credit score, but that is not necessarily true.  It depends upon how they pay their bills and how much of their credit they use and not necessarily on how much they earn.  Anyone can spend beyond their means, no matter how much they make.  And, anyone can be irresponsible with their income, regardless of how impressive it happens to be. 

Income not included

Credit scores are based upon data that is in the credit report..and nothing more.  Credit reports do not contain income data, therefore, it is not used in the development or calculation of credit scores. In addition, other information that measures wealth such as assets, savings, investments, and retirement are not included on your credit report or included in a credit score.  Consequently, none of these wealth metrics are components of your credit score.  It is a common fallacy that income is on the credit report and included in a credit score, because income is used to qualify for auto loans and mortgages and often a qualification in credit card applications.  The income information used in a credit decision comes from the application that you fill out for a credit card or loan and is self-reported, and is not from the credit report.

Just because you have a high income does not automatically make you responsible with your credit.  You can have high income and live beyond your means, make the minimum payment on your bills, and pay your bills late. You can do the same with a lower income.  On the other hand, a person with a low income can have a high score by paying their bills on time and in full.

Don’t get me wrong, you must have an income to qualify for credit, but you don’t have to be wealthy to have a high score.  The score not only looks at much you owe and your payment history, but also how long you have had credit, the number of new credit accounts, and combination of different types of credit. It takes time to obtain a high score because of these factors.

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JRU on 60 Mins SetCredit Reporting Expert, John Ulzheimer, is the President of Consumer Education at, the credit blogger for, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.