Credit Score Myths Debunked
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We all know that having a good credit score is important. But what do you need to know in order to maintain and build a good score? And where do the myths about credit scores come from? In this blog post, we'll explore some of the most common credit score myths and dispel them once and for all. So read on to learn more.
When it comes to credit score’s, here are some common myths:
- All credit reports are the same.
They are not. Two national credit bureaus, TransUnion, and Equifax may show different scores. Some creditors do not report to both of the bureaus.
- Requesting your credit report or asking for your score hurts it.
Not true. Your credit report is available to you on request without any scoring penalty. If, however, a third party, with whom you are applying for a credit card or a loan, requests your report (known as a hard inquiry), your score may be affected
- The more money you make, the higher your score.
Your salary does not influence your credit score. How well you pay your bills generally drives your score, not how much money you have. Making more money certainly makes it easier to pay your bills, but it alone is not a factor in achieving health credit.
- Closing credit card accounts improves credit health.
As logical as this sounds, that's not always true. Closing a credit card doesn't wipe out the history of the card. Negative credit card accounts are on reports for six years from the first date of delinquency. Closing a credit card account also decreases your available credit.
- Making the minimum payment keeps my score up.
Not true. Creditors will look at the amount you owe compared to the amount of credit you have available. Making the minimum payment while carrying a large amount of debt will not make a difference in your score.
- Divorce removes the bad credit habits of the former spouse.
Wouldn't that be great? It's not necessarily true. Joint accounts don't automatically become individual after the divorce is finalized. Contact your creditors. Ask for joint accounts to be converted to individual. Joint account activity may stay for some time.
- Co-signing doesn't affect your credit
Once again, that's not true. When you co-sign a loan, you may have responsibility for the debt. If the party for whom you co-signed misses payments, their score is impacted, and yours will be too.
The Bottom Marble:
A lot of people have misconceptions about credit scores. Maybe you’ve heard some myths, or maybe you just don't know where to start with your finances. MyMarble can help! We are a free solution that helps break down the basics so anyone can understand their financial wellness and take control of it. Signing up is easy-- all you need is an email address and basic information to get started! You'll be on your way to understanding how money works in no time at all :) Get started here!