Credit score myths are widespread, but I'm here to disprove some of them today! There is no doubt that there are lots of credit score myths doing the rounds nowadays, partly due to the proliferation of the Internet in our lives. These credit score myths can cause people to unnecessarily worry, or do things that they normally wouldn’t merely because they think it may help them later in life. This article should help you to spot what credit score myths you have fallen victim to, so that you no longer worry about damaging your credit score.
1. You Will Damage Your Credit Score by Checking It
One of the things to understand about credit scores is that you have the right, and even responsibility, to check that your credit score is correct and up-to-date. While it’s true that if you constantly apply for credit you may well damage your score, one of the myths about credit scores is that if you apply to see your score then it will be damaged. Vigilance in these sort of matters is extremely important, so don’t fear checking up on your score.
2. Shopping around Will Harm Your Credit Score
Here's a credit score myth that is not true at all. Shopping around to see what loans and mortgages have the best rates is not only positive, but actively encouraged. Making multiple inquiries about the same thing (shopping around) will only show on your record as having made one inquiry. So go for it!
3. Paying Debt is the Magic Cure
Sadly there is no magic cure for a bad credit score. One of the credit score myths that exist on the Internet is that as soon as you pay off some debt, and show for a few months that you are not fiscally-irresponsible, your score will automatically repair itself. This isn’t true – a credit score goes back over a long period of time, and you will not fix it that quickly.
4. Marriage Equals a Joint Score
Simply nonsense and it’s one of the important facts of credit scores that you should know. Your score is yours, and getting married will not result in a combined credit score. Joint accounts will lead to both of your scores being updated separately, but choosing a partner because they have a good credit rating to boost yours is not the way forward. Pay no heed to this credit score myth!
5. Credit Repair Companies Work
No, they do not. One of the worrying myths of credit scores it that you should use a company to dispute all of the information on your score, in the hopes that it will improve it. While you should check to make sure that the information is correct and up-to-date, credit repair companies offering the magic solution to your troubles are not the way for you to repair your score.
6. If You Pay on Time, You Have No Credit Score Problems
This is one of the misunderstandings of credit scores that is actually rather alarming. Everyone – and I mean everyone – should be regularly examining their credit report for inaccurate entries. If you do not check your credit report, you may get a nasty surprise when you go to apply for a large loan and, despite having always been on time with payments, find that you are rejected because of an inaccurate entry. Take responsibility: check your credit rating!
7. Closing Your Cards Helps
One of the things you should know about credit scores is that closing your cards may not help, but could also damage your credit rating. The longer you have a credit card that you have used responsibly, the better your rating will be. By closing cards, you will lower the total debt that you are managing, which may well lower your score.
Your credit score is something that will follow you through life, for better and for worse. Credit score myths need to be a thing of the past – learn from this article and put the tips provided here into practice. Some of these facts of credit scores you may well have known, but the Internet is an alarming beast and can cause all sorts of issues for those who fall prey to the myths of credit scores. Have you experienced any problems with misunderstandings of credit scores and credit score myths?