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Do the Rich Have Better Credit?

Information on the link between income and credit scores, and whether higher income reflects higher credit. Ultimately, does wealth affect credit?

There are a lot of things the rich might have, but one thing they can't buy? A good credit score.


It turns out that even the most fabulously wealthy can have bad credit, and in no way are they guaranteed to enjoy a positive score without managing their finances responsibly like the rest of us.

Income has no direct impact on your credit scores since they're based on your credit reports, which don't contain information on income. However, as a good rule of thumb, consumers should aim to have a low credit utilization rate (the amount of credit a person can borrow based on their credit limit). Credit scores are calculated primarily by assessing your payment history (35 percent), debt usage (30 percent), and length of credit history (15 percent).

Those facts aside, there are common sense reasons for why the rich might have an easier time maintaining an ideal credit score. For instance, if a person has a lot of expendable cash, chances are they can pay off their bills on time and in full, unless their taste is exorbitantly lavished. However, each person's money management style is different.

Certain semi-wealthy people that avoid borrowing as much as possible and as a result, face certain barriers when pursuing big-ticket items, such as a mortgage, which is based off of one's credit score. The truly wealthy however, will probably find workarounds with the financial hurdles they come across.

There is a curious correlation that exists between income and credit scores that can't be explained, however. Experian-Oliver Wyman Market Intelligence Reports and Experian's IntelliView tool analyzed average VantageScores as well as household income estimates for 2012 from the U.S. Census Bureau and found that states with higher median incomes were more likely to have higher average credit scores.

On the other hand, according to VantageScore data, the state with the highest median income, Maryland, didn't rank in the top states with the highest average credit scores at all.

So ultimately, does wealth affect credit? Experts and average consumers can posit theories and speculate as much as they want, but when it comes down to it, good credit is derived from responsible credit building and financial management.

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