What Affects Your Credit Score | Marcus by Goldman Sachs®

What you don’t know can hurt you. Here’s how.

Imagine this: Two years ago, Emily moved into a new apartment downtown. A few days later, the cable company called saying that she’d never paid her last cable bill at her old place. Emily insisted that she had. After weeks of fighting with the cable company, she gave up. She thought, I don’t need to resolve the dispute, it’s not worth it.

Emily moved on. But when she recently looked into buying her first apartment, the incident came rushing back. That cable bill had been sent to collections and landed on her credit report as a delinquency. A delinquency will have a negative impact on your credit score.

While Emily’s story is fictional, the point of this story is very real: While many people understand what a credit score is and why it matters to lenders, most people are still susceptible to the vast amount of unclear credit score information that’s out there. To avoid frustrating (and financially damaging) situations in your future, let’s look at some common misconceptions and see what there is to learn about what affects your credit score.

Fiction No. 1: Only big debts can affect your credit score.


Left unchallenged or unresolved, most negative information may stay on your credit report for up to seven years and impact your credit— even a small payment dispute. And unfortunately, a lower credit score usually means higher interest rates on big purchases, like a home.

The Good News

If an error appears on your credit report, you can contact the credit reporting agency and the company that provided the information to the agency to request that it be fixed. You should be sure to communicate any credit report errors in writing, so you have a record of correspondence in case questions come up later.

Fiction No. 2: The more money you make, the better your credit score.


Income is not a factor in your credit score. In fact, in Emily’s scenario, the unpaid cable bill is likely to be more significant than any salary increase she may receive. That’s because a credit report focuses on your past payment history and current outstanding debts, not how much money you earn.

The Good News

Regardless of your income, one way you can maintain a good credit score is by managing your credit utilization ratio, which is how much of your available credit you are using on a credit card. Responsible credit utilization is important – the general rule of thumb is to keep that ratio low and not maintain a balance over 30 percent of your credit limit on any card.

Fiction No.3: Your credit score is a static number.


Actually, you can simultaneously have several different credit scores, and your credit score can change frequently. Each credit reporting agency has its own list of credit factors and its own formula for calculating scores. In Emily’s story, the number didn’t only change when the delinquency hit her credit report. In the years following, her score would also fluctuate based on her growing credit history, payment history, and delinquencies (or lack thereof).

The Good News

The law requires each of the credit reporting agencies to provide you with a free copy of your credit report each year if you request it. And despite common belief, you can check your credit report without lowering your score.

Fiction No. 4: Checking loan rates with a lender or looking at your credit report will hurt your credit score.


There are two types of inquiries into your credit report, a hard inquiry and a soft inquiry. A hard inquiry occurs when a lender checks your credit because you submit an application for a loan or credit card. This type of inquiry appears on your credit report and can affect your credit score. When you check your own credit report or loan rates on a lender’s site it’s called a soft inquiry. Soft inquiries do not appear on your credit report and do not impact your credit score.

The Good News

Not all hard inquiries are created equal. Most credit scores are not affected by multiple inquiries from auto or mortgage companies. The credit reporting agencies typically see these inquiries as single events – they understand consumers may be shopping for a home loan or a new car. However, applying for several credit cards in a short period of time will appear on your credit report as multiple inquiries and could affect your credit score

The more you know about the factors that can affect your credit score, the better decisions you can make to keep your finances – and your credit history – on track.

Fiction No. 5: Only active or current debts affect your credit score.


As Emily experienced, your credit report contains negative information about your credit and payment history for both open and closed accounts – as far back as 10 years.

The Good News

Positive information about active and open accounts in good standing can stay on your credit report – and positively influence your credit scores forever. Unfortunately, negative information for both open and closed accounts can stay on your credit report and affect your overall credit score for seven years (and 10 years for bankruptcies). It’s a good idea to check your credit reports to ensure that negative information has been removed within the appropriate time period – and ask for a correction if you discover that it hasn’t.

Fiction No. 6: Simply speaking to a credit counselor can negatively affect your credit score.


Speaking with, and getting advice from, a credit counselor does not impact your credit score.

The Good News

A credit counselor can help you learn about budgeting and managing your finances, including advice for getting control of your debt and responsibly using credit cards. Participation in classes or counseling sessions will not affect your credit report. If your credit counseling leads to a debt being repaid through a debt management plan, with the credit counseling agency negotiating lower interest rates or reduced payments, that information could indeed be included on your credit report, where lenders will see it. Be aware, however, if the lender treats the debt as settled instead of paid in full, your credit score can be negatively affected. But the good news is getting advice and simple counseling can help you improve your financial situation without affecting your credit scores.

Fiction No. 7: Your marital status, race or age can affect your credit score.


The most widely used credit score, the FICO score, does not consider certain personal information in creating your credit score. This includes but is not limited to your race, color, religion, national origin, sex, marital status, age and where you live.

The Good News

U.S. law prohibits credit discrimination based on race, religion, national origin, age, sex, marital status or whether one receives public assistance. Remember, your credit score is intended to be a predictor of creditworthiness and financial health – not a commentary on your life or identity.

This article is for informational purposes only and is not a substitute for individualized professional advice. Articles on this site were commissioned and approved by Marcus by Goldman Sachs®, but may not reflect the institutional opinions of Goldman Sachs Group, Inc., Goldman Sachs Bank USA or any of their affiliates, subsidiaries or divisions.

Source: What Affects Your Credit Score | Marcus by Goldman Sachs®

Latest MLS Statistics for the Phoenix Market

The Phoenix Area Selling Season is in Full Swing!

Check out these statistics, and be sure to see the chart in the commentary.

12 Smart Home Gadgets That Make Great Housewarming Gifts | RISMedia’s Housecall

Looking for a housewarming gift for a new homeowner? Consider a smart home gadget that can change their lives for the better. Here are a few options.

By Jonathan Deesing

So your friend, coworker or daughter just purchased their first home and you want to honor the occasion with a housewarming gift—but the options seem limited. If you don’t want to be that person who gives yet another blender or bottle of wine you should give them something a bit more original and, preferably, a lot more functional.

Smart home gadgets fit the bill perfectly. The twelve home automation products below are organized into four demographics, but most of these gifts would surely delight any new homeowner.

The Working Professional or Parent

Belkin WeMo Switch Smart Plug

You won’t spend a lot of money on the Belkin WeMo Switch Smart Plug, but it will deliver a powerful punch. When homeowners plug it into an outlet and connect a coffeepot or other appliance, they can turn the appliance on or off from anywhere at any time. They can also connect the lights to the plug to easily set schedules and synchronizations.

Beddi Smart Alarm Clock

The Beddi Smart Alarm Clock claims almost unbelievable functionality. Its compact design features two Bluetooth speakers with a Spotify Premium integration, a white noise generator to lull a homeowner to sleep, and two charging ports. It also boasts three customizable buttons that homeowners can use to control other devices, such as an overhead light, fan or the aforementioned coffeepot.

ECOVACS Automatic Robotic Vacuum Cleaner

If your homeowner has young kids, you know the floors rarely stay clean for long. Things like Cheerios leave a trail across a room and, if not picked up quickly, are soon crushed into the carpet or pounded into the wood floor. The ECOVACS Automatic Robotic Vacuum Cleaner takes care of cleaning catastrophes by regularly sweeping the home for stray cereal and any other lingering materials. It comes in under $200 on Amazon, so it won’t put you in the red if purchased as a housewarming gift.

Related: 5 Ways to Turn Your Home into a Smart Home

The Eco-Friendly Penny-Pincher

Holmes Smart Wi-Fi-Enabled WeMo Air Purifier

The “WeMo” name gives away the secret, but this gem of an air purifier integrates seamlessly with the Belkin WeMo line. Your homeowner simply opens the app to check or adjust settings from anywhere. Besides providing cleaner air, the Holmes Smart Wi-Fi-Enabled WeMo Air Purifier issues alerts when it needs to be cleaned or requires a new filter.

Nest Thermostat

Nest reigns in the smart thermostat market, although the ecobee3 brings some stiff competition. The Nest Thermostat appears here because it, like the Holmes air purifier, works with the Belkin WeMo Switch Smart Plug. If these products are used together, the home “knows” when the homeowner gets home at night and responds accordingly by automatically turning the lights on or adjusting the temperature.

Philips Hue Starter Kit

Philips Hue offers colored and white smart lightbulbs. You can’t go wrong with either, but you should start with the white bulbs if you’re looking for a basic solution. The Philips Hue White Starter Kit comes with two LED bulbs and a bridge. Keep in mind that without the bridge, the bulbs won’t connect with Amazon Alexa or any other home automation hub.

The Concerned Citizen

August Smart Lock

The August Smart Lock turns smartphones into house keys. It sounds fancy, but it also improves safety and security. With the August Smart Lock, your homeowner won’t worry about losing a key during a run at the park. They also won’t be concerned with who can get inside the home—the smart lock allows users to control who has access and to monitor activity via the mobile app.

Nest Camera

For indoor surveillance, you can’t go wrong with the Nest Camera. The camera allows homeowners to check on anything from kids to a mischievous puppy at any time and from any place. It also sends alerts when it notices strange activity, prompting the homeowner to view the live video and make sure everything is all right.

ADT Pulse

A home is a big purchase, and it deserves to be protected. ADT Pulse provides that protection along with a mobile app so that homeowners can monitor the home on the go. ADT Pulse requires a month-to-month subscription, however, so keep that in mind if you’re considering this item as a gift.

The Entertainer

UE BOOM 2 Phantom Wireless Bluetooth Speaker

If your homeowner wishes for the surround-sound effect, the UE BOOM 2 Phantom Wireless Speaker is a great gift idea. It offers 360-degree sound, along with a decent bass. It can be used indoors and outdoors so it’s “designed for adventure.”

Crock-Pot Smart Slow Cooker with WeMo

The WeMo integration with this product means your homeowner can check on a pot of chili while at work or sitting in traffic. With the Crock-Pot Smart Slow Cooker, homeowners will serve an always-hearty-and-never-burnt dish to family and guests.

Anova Culinary Bluetooth Precision Cooker

The Anova Culinary Bluetooth Precision Cooker can attach to almost any cooking pot and keeps water at an exact temperature. This smart home gadget uses the sous-vide method, which allows the food to retain its flavor better than it would with frying or grilling methods. This makes it possible for vacuum-sealed bags of meat, fish, poultry, or vegetables to be added to the temperature-controlled water and cooked for several hours. The end results are melt-in-your-mouth delicious.

Source: 12 Smart Home Gadgets That Make Great Housewarming Gifts | RISMedia’s Housecall

8 High-Tech Features to Include in Your Next Remodel

Planning a remodel? Make the most of it with some high-tech features that will wow future buyers!

Fictive application controlling the modern house

Really cool learning thermostats and streaming cameras with up to 30 day memories!  Check this out for fun, even if you don’t plan to upgrade.

Source: 8 High-Tech Features to Include in Your Next Remodel | RISMedia’s Housecall

February 2017 Market Infographic