There is so much information out there about credit scores and credit reports and many of that information can be misleading. In this post we go over some of the most popular credit score myths that people believe.
1. Checking Your Credit Report Will Hurt Your Score
Checking your credit report will not only NOT hurt your score, but it will help you improve your score.
You should be checking your credit report on a regular basis. It is one of the best things you can do to help your credit score.
By regularly checking your credit report you are able to:
- Monitor your credit and catch any mistakes before they hurt your credit score.
- Know about any old accounts that still have money owed on them.
- Keep track of debts that you currently have.
Where You Can Check Your Credit Report:
2. Getting Married Combines Both Of Your Scores
Getting married does not combine scores.
What will affect your score and your spouse’s score is if you have any credit cards or loans in both of your names. Anything changing your score will also change the other score too.
3. Bad Scores Stay Bad
Depending on the type of bad credit you have that affected your score, it will only affect your score for 7 – 10 years.
You can also help bring up your credit score by making payments on time and decreasing the amount of debt you are utilizing.
4. You Only Have One Credit Score
This credit score myth is completely false.
In-fact you have many credit scores.
There are however just a few that creditors usually check, and those are FICO, Experian, Transunion, and Equifax. These are also usually the ones you will receive on a credit report if you check yours.
5. Paying off Debts in Collection Will Keep It From Hurting Your Credit Score
Even if you pay off a collection account that does not mean it will be removed from your credit report.
The debt will be gone but the credit score effect that it had will still be there.
However, over time, the effect that it had on your score will go down.
So a paid off collection from 4 years ago will not weigh as heavy on your credit score as a paid off collection from 6 months ago.
6. Accumulating Debt Is How You Get a Good Credit Score
You do not need to put yourself into debt in order to get a good credit score.
You can open up a credit card and use it, just make sure that you pay it off in full each month and don’t carry a balance.
7. Just One Late Payment Won’t Hurt Your Score That Much
This is one of the more popular credit score myths.
And it probably is a more popular myth because many people don’t want to think that the one time they were late really caused too much damage.
But it can hurt your credit score.
Just one late payment can cause a substantial hit to your credit score.
So make sure to make all of your payments on time.
Using bill pay automation can help out with this credit score myth a bunch. By making sure your payments are automated you don’t run as much of a risk of forgetting to make a payment.
8. Your Lender Sees The Same Credit Score You See.
Unfortunately, this is another one of the big credit score myths.
When you check your score it’s not the same one that your lender will see or the one that they will use.
You don’t know which credit score your lender will be using (remember, there are many credit scores for you out there).
Also you credit score can vary day by day. So if you checked it last Thursday, by Next Tuesday it can change.
Another factor is that there can be quite a difference between the different credit scores available. You might see a 40 or 50 point difference between Transunion and Equifax credit scores.
So make sure you are focusing on the main principles of keeping a good credit score.
9. It Takes 7 Years to Improve Your Bad Credit Score
The length of negative factors on your credit report will matter less as time passes on.
So while things like bankruptcy or a collection can stay on your report for 7 or more years, if it was 6 years ago, that’s going to look better than 1 year ago.
Also even after bad marks on your credit report roll off, you still have to show that you are responsible with your debts and pay on time with your current accounts.