Settling your (credit) score

Think you know everything there is to know about credit scores? Sure, a solid FICO score requires that you pay your credit card bill on time each month and don't default on your mortgage. But credit scores are complicated, and many people are surprised to learn the rules of the game, says Beverly Harzog, a credit expert and consumer credit advocate. "Unless you're a credit geek like me, there are so many things about credit most people are unaware of," Harzog says.

One recent survey by the Consumer Federation of America and VantageScore, which represents the three major credit scoring agencies, found that a third of people in the United States do not know that phone companies check credit scores (they do), 21 percent think that ethnic origin factors into scores (wrong) and another 56 percent believe that age is a consideration (wrong again).

Here is a list of 13 things about credit that surprised even me:

1. Income does not affect your credit score. "You could be a factory worker and have a great FICO score, or be a brain surgeon and have a terrible credit score," Harzog says.

2. Income, however, can affect your ability to get a credit card. New laws allow card issuers to turn down applicants who do not have a steady stream of income.

3. You and your spouse might have completely different credit scores. A stay-at-home mom with no income and no accounts in her own name might have very low credit scores, regardless of her husband's income or credit score.

4. Paying off a collection account won't boost your credit score. "But it can prevent further damage," says Gerri Detweiler, Credit.com's director of consumer education.

6. Opening a bunch of cards at once will also damage your credit. "Every time you apply for a card, your score drops a little," Harzog explains. When trying to repair or build credit, open one card, use only 10 or 20 percent each month, and pay it off in full and on time.

7. If you co-sign for a credit card, the balance affects your debt ratios and credit score.

8. If you're the co-signer, lenders don't have to tell you if the borrower is behind on payments. "You may not find out until it's too late," Detweiler warns.

9. Debit cards are not reported to credit agencies and do not affect your score.

10. Credit is a use-it-or-lose-it game. "If your home and car have been long paid for and you pay cash for everything, your credit score may be as low as someone with bad credit," Detweiler says.

12. Most people think there are three sources of credit scores: Equifax, Experian and TransUnion. In reality, there are about 30 different tools that can be used to determine your score. These include individual credit card companies, auto lenders and home insurers, which also check your credit before providing a quote, Detweiler explains. All the other agencies rely on information from the Big Three but tweak their calculations based on criteria that are important to them. "The three big ones provide the ingredients that the others use to cook up their own credit scores," Detweiler says.