Is there a link between your income and credit score?
We do know that income, net worth, or available assets DO NOT factor into your credit score. In fact, FICO promotes sound information for consumers who want to understand what goes into their score and work to improve it, and they explicitly state that your income will not have any effect on your FICO score.
However, if we flip that question around, we suddenly have a more interesting conversation.
While we know that your income doesn’t determine your score, does your credit score have some sort of bearing on your net worth?
Several studies actually show that there is a correlation between high credit scores and high net worth’s or incomes.
One of those studies was based on data released by the Federal Reserve Bank, no less. They lined up the data on median family income (MFI) compared to median credit scores. Read more…