Question: Does checking your own credit hurt your credit scores?

Fortunately, this isn’t the case. As many of our members know, checking your credit scores on Credit Karma is reported as a soft inquiry and it won’t negatively impact them.

But that got us thinking: What questions or misconceptions do people have about credit? The factors that actually make up a credit score may be a lot different from what you think.

What’s in a credit score?

Below are the factors that are typically used to calculate your credit scores, by the level of impact they can have on your scores. Because there are different credit scoring models, how factors are weighted can vary slightly from model to model.

High impact credit score factors

Credit card utilization

This refers to how much of your available credit you’re using at any given time. It’s determined by dividing your total credit card balances by your total credit card limits.

Most experts recommend keeping your overall credit card utilization below 30 percent. Why? Because lower credit utilization rates suggest to creditors that you can use credit responsibly without relying too much on it.

Payment history

This is represented as a percentage showing how often you’ve made on-time payments. Paying bills on time shows lenders and creditors that you’re reliable and more likely to pay back your debts.

Derogatory marks

Derogatory marks that may affect your credit include accounts in collections, bankruptcies and foreclosures.

Medium impact credit score factors

Age of credit history

This factor shows how long you’ve been managing credit. While your average age of accounts isn’t typically the most important factor used to calculate your credit scores, it’s important to think about. Closing your oldest credit card account, for example, could end up negatively impacting your scores.

Low impact credit score factors

Total accounts

This refers to the number of credit cards, loans, mortgages and other lines of credit you have.

Hard inquiries

Hard inquiries usually occur when you apply for a new line of credit, such as a loan, credit card or mortgage, but can also take place when, for example, you rent an apartment. A lot of hard inquiries on your credit reports within a short time period may suggest that you’re desperate for credit or aren’t getting approved by other lenders. Hard inquiries can slightly lower your credit scores.

As mentioned above, salary, age and employment history don’t factor into your credit scores. Other things that don’t go into your scores include:

• Race/ethnicity
• Religion
• Nationality
• Gender
• Marital status
• Where you live
• Your total assets

Also, while soft inquiries may be included on your credit reports, they don’t affect your scores. These generally occur when a person or company checks your credit as part of a background check — think employer background checks or pre-qualified credit card offers. Another example of a soft inquiry? Checking your credit scores on Credit Karma.

Next steps

Though a lot of credit misconceptions exist, credit doesn’t have to be hard to understand. By recognizing the basic credit score factors, you can learn how to maintain and improve your credit health with confidence.

Perhaps you’ve heard horror stories of credit card debt and ruined credit scores.

Credit cards can provide great perks and allow you to earn cash back or rewards for your purchases. They also serve as tools for helping you build credit, which can be important if you want to buy a house or car one day.

But there are some risks involved in using credit cards, and if you’re opening a credit card for the first time, you may be nervous.

But if you’re aware of the dangers of credit cards, you can avoid making these mistakes while using credit cards wisely and taking advantage of their perks, benefits and rewards.

Below we’ve listed five risks of credit cards, as well as tips on how to manage them.

• Getting into credit card debt
• Missing your credit card payments
• Carrying a balance and incurring heavy interest charges
• Applying for too many new credit cards at once
• Using too much of your credit limit

1. Getting into credit card debt

If you have the wrong attitude about credit cards, it could be easy to borrow more than you can afford to pay back. A credit limit should be thought of as a loan extended to you by a credit card provider as opposed to free money to spend. Credit card balances generally come with interest rates. Every time you add to your balance and don’t pay it off in full within the billing cycle, you’ll have to pay that much more in interest. This can make it difficult to get out of credit card debt.

Here’s how to think about it: If your card’s credit limit is $2,000, this doesn’t mean you should plan on spending $2,000 that month unless you know you can pay off your bill in full right away.

The takeaway? Be mindful of your spending, and make sure you’re not buying more than you can afford. Consider creating a monthly budget and figuring out how much you can afford to spend each month — and then try not to exceed this.

There are several apps and tools that can help you track your spending. Or if you’re more of a do-it-yourself type, there’s the option of creating a simple spreadsheet or list of your monthly expenses.

2. Missing your credit card payments

Your payment history is one of the biggest factors that contribute to your credit scores, so missing payments can have a serious impact on your credit.

Also, if you miss a payment, you’ll typically be charged a late fee. A penalty APR may be applied to your account as well.

Your late payment may be reported to the three major consumer credit bureaus if it’s more than 30 days late, and it may stay on your credit reports for up to seven years.

One way to potentially avoid this is by setting up automatic payments. With autopay, you won’t have to worry about forgetting to pay your bill, but you will be responsible for ensuring there’s enough in your account when the automatic payment is withdrawn.

You could also set up text or email reminders for when your monthly bill is almost due to make sure you pay on time.

3. Carrying a balance and incurring heavy interest charges

If you carry a balance over to the next month, you could end up paying a significant amount of interest. Credit card interest rates can vary depending on the card and your credit health, but they can run high.

According to the Federal Reserve, as of August 2024, the average credit card annual percentage rate, or APR, was 21.76%. But if you have average or poor credit, you’ll likely pay an even higher rate.

If you’re carrying a high balance and having trouble paying it down, one option you may consider is applying for a balance transfer card. Some balance transfer cards offer a 0% introductory rate during a period of anywhere between nine and 21 months, meaning you won’t pay interest on your balance during that time.

The best way to avoid having to pay interest? Try to pay your credit card statement balance in full and on time every month.

4. Applying for too many new credit cards at once

When you apply for a credit card, you generally get a hard inquiry. This means that a credit card issuer checks your credit, and this check can subsequently show up on your credit reports.

A hard inquiry can lower your credit scores by a few points, but the effect of each individual check can decrease or even disappears over time.

You may want to avoid applying excessively for credit cards or for cards you don’t actually need. That said, you shouldn’t generally let this worry you if there’s a specific credit card you’re looking to get.

You may also want to avoid cards you’re unlikely to be approved for, because you’ll have added a hard inquiry to your credit reports without any reward. Credit Karma Approval Odds compares your credit profile to the credit profiles of other members who were approved for the card to assess the likelihood you’ll be approved, so consider checking this through your Credit Karma account before applying for a card.

5. Using too much of your credit limit

Your credit scores can be negatively affected if you have a high credit card utilization ratio. Credit card utilization ratio refers to how much of your available credit limit you’re using.

Utilization ratio is an important indicator of lending risk. Creditors believe that when you reach or exceed your credit limit, you are more likely to have trouble repaying the money than would someone with a lower utilization ratio, which makes you more of a risk to credit issuers. If you’re perceived as a riskier bet, credit issuers are less likely to approve a new credit for you and the credit you do receive will likely come with higher interest rates.

A good rule of thumb is to keep your credit utilization under 30%. If your credit utilization ratio is currently higher than you’d like, consider asking your credit card issuer for a credit limit increase (which is at your issuer’s discretion and may involve it making a hard inquiry if it checks your credit). Or if at all possible, try to limit your spending by budgeting. If you’re carrying credit card debt, paying it off will also reduce your credit utilization ratio.

Bottom line

Though there are dangers associated with using credit cards, you can minimize their impact by following some basic principles. As with using any form of credit, it’s best to avoid complacency and maintain a sense of discipline — you might find a little can go a long way for your credit scores.

*Approval Odds are not a guarantee of approval. Credit Karma determines Approval Odds by comparing your credit profile to other Credit Karma members who were approved for the card shown, or whether you meet certain criteria determined by the lender. Of course, there’s no such thing as a sure thing, but knowing your Approval Odds may help you narrow down your choices. For example, you may not be approved because you don’t meet the lender’s “ability to pay standard” after they verify your income and employment; or, you already have the maximum number of accounts with that specific lender.

U.S. household debt jumped for the fifth consecutive year and now stands at a record-breaking $13.15 trillion.

On Tuesday, the Federal Reserve Bank of New York (what you may know as the Fed) released its quarterly debt report, which says the national household debt figure crept up almost 1.5 percent in the fourth quarter of 2017.

That may not sound like much, but 1.5 percent in this case translates to $193 billion – enough to push the total debt figure to $13.15 trillion. If we split that debt evenly among every single person in the U.S. – babies and children included – each person would be accountable for more than $40,000 in debt.

What does this really mean?

While the Fed’s report might sound startling, it’s not necessarily bad news. As economist Diane Swonk recently told the Wall Street Journal, “The current level of debt is still manageable and is likely to grow further this year.”

One important factor to look at is how Americans are keeping up with their debt payments.

The amount of debt the Fed defines as “seriously delinquent” (at least 90 days late) actually dropped between the third and fourth quarters of 2017, from 2.4 percent to 2.3 percent.

That slight decrease suggests Americans may be doing a better job of paying off their existing debts in a timely manner.

It’s also revealing that mortgages make up the largest chunk of the debt increase. Mortgage debt rose by $139 billion last quarter to $8.88 trillion, which could mean that Americans have more confidence in the housing market.

(And in case you’re wondering, overall mortgage balances are still below where they stood prior to the Great Recession.)

But the Fed’s report does contain some troubling signs – specifically about the state of student loan debt.

Student loan debt delinquency is high. The Fed reports that 9.3 percent of student loan balances have moved into serious delinquency. You’ve probably either heard about or been affected by what many are calling the “student loan crisis,” and this stat underlines how serious that crisis has become.

In fact, effective delinquency rates for student loans are likely much higher than the 9.3 percent reported.

As the Fed’s report notes, about half of these loans are currently in deferment, in grace periods or in forbearance, meaning they’re temporarily not in the repayment cycle. This could mean that delinquency rates are roughly twice as high among loans in the repayment cycle.

Why should I care?

This macro trend might be reflective of something more personal.

If you’re like a lot of Americans, debt is never far from your mind. In a Credit Karma survey of more than 2,000 individuals in December 2017, 24 percent of people said that making monthly payments toward debt is a major concern.

The good news is, you’re not alone. Millions of Americans deal with the stress of paying down debt.

While debt isn’t necessarily a bad thing in and of itself, it can seriously impact your day-to-day life if the debt starts to spin out of control. So it’s important to have a plan in place to manage your debt.

What can I do?

If you’re on-time with your credit card, mortgage and other debt payments and you feel as if you’re managing your spending responsibly, keep at it! You’re already doing great.

But if you’re struggling with debt? There are things you can do to help you get back on your feet. Here are some tips to get started:

• Try to always make (at least) the minimum payment on time. Even if you can’t pay off your entire balance each month, paying the minimum is a must for maintaining healthy credit. You don’t want to lose all the hard work you’ve put into building your credit scores just by missing a payment or two.
• Change your payment due date. Let’s say your credit card payment is due on the 14th of every month and you get paid on the 15th. Your credit card company might let you change your monthly due date online or by calling up customer service. This way, you can make sure your bank account isn’t short on funds needed for payment. Read more on how to pay your credit card bill.
• Consider a balance transfer for high-interest debt. If you’re swimming in credit card debt and forking out what feels like a fortune in interest charges, a balance transfer could be just what you need. Getting a balance transfer credit card, which may offer a low or 0 percent introductory APR, could give you more time to pay off your debt.
• Negotiate debt with your credit card company. Does your debt feel out of control? Your credit card company might be willing to work with you to establish a plan that works for both sides. Check out how to do that here.

Question: Does checking your own credit hurt your credit scores?

According to TransUnion’s July 2017 credit literacy survey, a lot of people think so. Of the 1,002 U.S. consumers included in the survey, nearly half thought that checking your own credit scores has the same effect as when a lender checks them.

Fortunately, this isn’t the case. As many of our members know, checking your credit scores on Credit Karma is reported as a soft inquiry and it won’t negatively impact them.

But that got us thinking: What other questions or misconceptions do people have about credit? The factors that actually make up a credit score may be a lot different from what you think.

Let’s dig a bit deeper.

• What’s in a credit score?
• High impact credit score factors
• Medium impact credit score factors
• Low impact credit score factors
• How can I further understand credit scores?

What’s in a credit score?

Below are the factors that are typically used to calculate your credit scores, by the level of impact they can have on your scores. Because there are different credit scoring models, how factors are weighted can vary slightly from model to model.

Jeff Richardson, vice president of marketing and communications at VantageScore Solutions —which produces the VantageScore 3.0 credit scoring model — says that, regardless of the model, “there are a number of tried and true ways to get a good credit score and maintain it.”

High impact credit score factors

Credit card utilization

This refers to how much of your available credit you’re using at any given time. It’s determined by dividing your total credit card balances by your total credit card limits.

Most experts recommend keeping your overall credit card utilization below 30 percent. Why? Because lower credit utilization rates suggest to creditors that you can use credit responsibly without relying too much on it. Individuals whose credit card utilization soars above 30 percent may be more likely to fail to repay their loans than those who keep their balances low.

Another benefit of keeping your utilization low? Having available credit can help if something unexpected arises which you then have to pay for.

Payment history

This is represented as a percentage showing how often you’ve made on-time payments. Paying bills on time shows lenders and creditors that you’re reliable and more likely to pay back your debts.

Late or missed payments can significantly harm your credit scores, so it’s important to try to pay all your bills on time.

Derogatory marks

As of July 1, 2017, about half of all tax liens and nearly all civil judgments have been removed from consumers’ credit reports. That’s good news, because having those derogatory marks on your reports can lower your credit scores. Other derogatory marks that may affect your credit include accounts in collections, bankruptcies and foreclosures.

Medium impact credit score factors

Age of credit history

This factor shows how long you’ve been managing credit. It doesn’t refer to — as some may think — your actual age.

While your average age of accounts isn’t typically the most important factor used to calculate your credit scores, it’s important to think about. Closing your oldest credit card account, for example, could end up negatively impacting your scores.

To sum up: The longer you manage your credit responsibly, the more you demonstrate your creditworthiness to lenders.

Low impact credit score factors

Total accounts

This refers to the number of credit cards, loans, mortgages and other lines of credit you have.

Lenders generally like to see that you have used a mix of accounts on your credit responsibly. It generally shows that other lenders have trusted you with credit.

Hard inquiries

Hard inquiries usually occur when you apply for a new line of credit, such as a loan, credit card or mortgage, but can also take place when, for example, you rent an apartment.
A lot of hard inquiries on your credit reports within a short time period may suggest that you’re desperate for credit or aren’t getting approved by other lenders.

Hard inquiries can slightly lower your credit scores. It might seem counterintuitive: To build your credit, you need lines of credit — so why should your credit scores take a hit because you applied for a new account?

Richardson says that any time you take on a new credit obligation, there’s an element of risk involved. Credit models see that and want to understand if you’re able to handle that new obligation.

After you’ve made on-time payments for a few months, the impact of that hard inquiry should go away or diminish, he says.

As mentioned above, salary, age and employment history don’t factor into your credit scores. Other things that don’t go into your scores include:

• Race/ethnicity
• Religion
• Nationality
• Gender
• Marital status
• Where you live
• Your total assets

Also, while soft inquiries may be included on your credit reports, they don’t affect your scores. These generally occur when a person or company checks your credit as part of a background check — think employer background checks or pre-qualified credit card offers. Another example of a soft inquiry? Checking your credit scores on Credit Karma.

How can I further understand credit scores?

Consider signing up for Credit Karma, where you can see your VantageScore 3.0 credit scores and credit reports from two of the three major credit bureaus, as well as learn more about how your scores are calculated.

You can also access educational tips on the Credit Karma app or site as well as articles about how to manage your credit.

Next steps

Though a lot of credit misconceptions exist, credit doesn’t have to be hard to understand. By recognizing the basic credit score factors, you can learn how to maintain and improve your credit health with confidence.

Summer kicks off the most popular time of year for couples to tie the knot — which means it’s also the season when couples may be shelling out a lot of cash on their weddings.

The average cost of a wedding in 2021 was $28,000 for the ceremony and reception ($34,000 if you include the engagement ring), according to The Knot’s 2021 Real Weddings Study. The average cost per guest was $266.

Once you start planning for your wedding, you might get hit with sticker shock and find yourself paying for a number of items you weren’t quite prepared for. Wedding Wire found that more than half of the couples who had set a wedding budget ended up increasing their initial budget — in some cases because of unexpected costs or having underestimated costs.

We asked wedding experts to share some common unexpected wedding costs, and we’ve also included how much you might expect to pay for them (though these can vary considerably depending on factors such as your location, the vendor and venue).

• Average wedding costs by expense
• Average wedding costs by state
• Unexpected wedding costs
  1. Cake-cutting fees
  2. Postage
  3. More time at your venue
  4. Additional power
  5. Event liability insurance
  6. Gratuities
  7. Alterations
  8. Additional staffing fees
  9. Childcare services
  10. Guest transportation
  11. Miscellaneous photographer and related fees
  12. Trial hair and makeup
  13. Vendor meals

Average wedding costs by expense

In 2021, The Knot’s data showed that couples hired an average of 14 wedding vendors. Here’s a breakdown of average vendor costs.

Source: The Knot Real Weddings Study, 2021

Average wedding costs by state

The Knot’s 2021 Real Weddings Study revealed that couples in New Jersey pay the most on average for weddings, shelling out $47,000 (not including the cost of an engagement ring). In second and third place are Washington, D.C., at $44,000 and Rhode Island at $43,000.

Couples in Wyoming pay the least ($15,800), followed by Oklahoma and Idaho (both at $16,000) and Kansas ($17,000).

Source: The Knot Real Weddings Study, 2021 (*2019 data)

Unexpected wedding costs

1. Cake-cutting fees

“As an event planner, I know firsthand that there is one unforeseen expense that usually blindsides the wedding party — cake cutting! Most vendors charge a fee per slice. If you have 150 guests and there’s a $1.00 fee per cut slice, you can owe an additional $150 solely for cake cutting. This is a key service to factor into the budget.”

— Nicole Marie Harris, owner and creative director at event planning and design firm Dreams in Detail

Potential extra cost — $1.50 or more per guest

2. Postage

“Avoid sticker (or stamp) shock by researching as much as possible when budgeting for wedding invitations and postage.

“You know you’ll need stamps for your outer envelope, but don’t assume you can get by with a standard stamp. An invitation with more pieces, such as a direction card or map and separate RSVP envelope, which you may also want to pre-stamp, will be heavier.

“Your cost per invite can quickly jump from the standard 40 cents [for a postcard] to as much as a couple dollars. If you have a guest list of 150 people, the additional postage quickly adds up.

“Also, invites that are oddly shaped [may be] more expensive to mail.”

— Kristen Ley Green, co-owner of Something New for I Do

Potential extra cost — Up to around $2 per invitation

3. More time at your venue

“In order for a couple to have their wedding at some sites, they may need to buy additional time from the venue — if the site will sell the extra time. Be prepared for extra costs for securing more time.”

— Joyce Scardina Becker, designer-in-chief and president, Events of Distinction

Potential extra cost — $500 per hour isn’t unusual, depending on the venue, but can even be up to $1,000 to $2,000 per extra hour if you don’t negotiate beforehand

4. Additional power

“At a hotel, having a band perform or utilizing lots of specialty lighting could require additional power, called a ‘power drop.’ This is something many couples don’t foresee.”

— Dezhda Gaubert, former owner, No Worries Event Planning

Potential extra cost — $300 to $500

5. Event liability insurance

“The venue may require event insurance. This ensures that the venue will be able to repair or replace anything that the wedding guests or vendors break.”

— Amy Nolan and Carolyn Johnson, owners and wedding consultants, An Event Less Ordinary

Potential extra cost — Depends on the amount of coverage, but budget for $150 to $550

6. Gratuities

“It’s both greatly advised and appreciated to tip your planners, musicians, rental crew, officiant and transport drivers or valets. Your gratuity for food service should be included in your quote from the venue or caterer — but if not, make sure you plan for this as well.”

— Anastasia Stevenson, Coastal Creative Weddings

Potential extra cost — Can vary depending on your vendors, but here’s a helpful wedding vendor tipping cheat sheet that can guide you

7. Alterations

“Whether you buy off the rack or have your attire custom-made, this is a cost that most couples forget to add to the budget. If you purchase your dress or suit early in the planning process, there’s a good chance you can lose or gain a couple of pounds, which may require you to have the outfit altered.”

— Cat Feliciano, certified wedding and event planner

Potential extra cost — Around $500 for a wedding dress or $150 for a suit

8. Additional staffing fees

“Many catering proposals are written with ‘minimal staffing.’ For a seated, plated fine-dining experience, you may want one wait staff person per table of eight and one bartender per 75 guests. Be prepared for extra labor charges if excellent service is important to you.”

— Joyce Scardina Becker, designer-in-chief and president, Events of Distinction

Potential extra cost — Typically $20 to $30 per hour for each additional wait staff, depending on the vendor

9. Childcare services

“[Couples] may have strict rules about children at their weddings. But a lot of parents feel they shouldn’t have to be responsible for finding childcare, especially if they’re traveling to the wedding. Some parents also don’t want to be far away from their children.

“What couples may not know is that they may be left paying for childcare [at or near the venue] if they don’t want children [attending the] wedding.”

— Rachel Charlupski, founder, The Babysitting Company

Potential extra cost — Upward of $100 per hour, not including agency fees, parking for sitters and a meal

10. Guest transportation

“It’s become more and more popular to transport guests to and from the venue, even if that venue is easily reached by car. Transportation for guests is often in the several thousands [of dollars], depending on the amount of guests the couple would like to transport.”

— Dezhda Gaubert, former owner, No Worries Event Planning

Potential extra cost — A 45- to 55-passenger coach generally runs around $1,000 (from pick-up before the wedding ceremony to end of the wedding)

11. Miscellaneous photographer and related fees

“Typically, wedding photography packages are based on consecutive hours. If there’s a break slot within your wedding day, a photographer will most likely charge you for this time anyway.

“[Another fee you may encounter is] for the limo driver to wait while the couple and wedding party take portraits. Most limo companies request that the driver leave and return after the portraits are complete. However, if the couple requests that the driver stays, the couple may be charged an additional fee.”

— Alice Bil-Szot, owner/photographer, studioEPIC (Canada)

Potential extra cost — A photographer may charge $250 or more per hour for overtime, while a limo driver may charge between $50 and $150 per hour (plus tip) of wait time

12. Trial hair and makeup

“Brides usually budget for the cost of hair and makeup services day-of, but often forget how important it is to have a trial done to ensure the look you’re going for can be achieved.”

— Cat Feliciano, certified wedding and event planner

Potential extra cost — Anywhere between $50 and $150

13. Vendor meals

“When you’re planning an event that will have your vendors working long hours, you should prepare to include your photographers, planners and musicians in your count to the caterers.”

— Anastasia Stevenson, Coastal Creative Weddings

Potential extra cost — Around $75 per vendor staff member (assuming the cost is similar to feeding your guests), according to the The Knot’s 2021 Real Weddings Study

Next steps

As you create your wedding budget, be sure to consider all potential costs. You might even leave a little wiggle room in your budget for expenses that pop up.

If you’re struggling to pay for your big day, a wedding loan may be a solution — but you’ll need to weigh taking on debt versus having your dream wedding. Also, be sure to pay attention to the loan’s interest rate, which can significantly increase the cost of borrowing money.

If you prefer to avoid a loan, check out our tips for saving money for your wedding.