Things That Are Related To Money But Are Not Helping Your Credit
- Paying in cash
- Prepaid cards and gift cards
- Checking account* functions: writing & depositing checks.
- Transferring money to other checking accounts
- Using a debit card
- Savings accounts
- Your income**
- Any other invested assets like stocks, retirement accounts etc.***
- Utility & Phone Bills****
- Non-credit store rewards cards and shopping rewards programs (think Ralph’s or Sephora card)
Remember- most of these tools only help you spend the money that is already in your account. If you have no cash in your pocket or in your account, you cannot pay (think declined debit card or overdraft). Credit, on the other hand, means that you could technically have no money in your checking or savings account (say while you are waiting for a paycheck) but you could still spend money with the promise that you will pay it back later (not at all something that you want to do but just hypothetically speaking.)
*If issues like overdraft (taking too much money out) or bounced checks (i.e. someone can’t cash a check that you wrote because your account doesn’t have enough to pay it) result in your account going to collection, it will show up on your credit reports and be negative. Normal transactional stuff like using your checking account to pay your debit card etc. will not show up.
** Indirectly affects credit. Example: This may be asked when you are trying to get a credit card and they are trying to determine your credit limit (aka how much they will allow you to spend). Having a high income alone does not affect your credit itself, nor does it mean you can necessarily get more credit (especially if you can’t pay off the debts you already have) but it could help.
***Even though you may be able to use some of these assets to pay off your bills, they do not affect your credit. Just because you saved money and invested it doesn’t mean you’re any good at borrowing money and paying it back.
****This will only affect you if you don’t pay your utility bill and it has to go into collection.