Six More Credit Score Myths Busted
Here are six more common myths about your credit score "busted".
It's important to earn and maintain a good credit score, because a good credit score can give you more financial options.
There are many myths about how your credit score works, and what may help or hurt your credit score. Here are six more common myths about credit scores, and the truths behind those myths.
More Credit Score Myths and Truths
Myth: Your credit score alone determines whether or not you get credit.
Truth: Your credit score is a big factor in credit decisions, but it's not the only factor. Other factors, such as your relationship with your lender and how long you've been in your current job, may come into play.
Myth: Your credit score contains personal information about you.
Truth: Your credit score doesn't contain personal information, such as age, gender, race, religion, or marital status, nor does it contain work-related information, such as your income, where you work, or your work history. Your credit score doesn't contain anything that isn't related to your past credit performance or that doesn't predict future credit performance.
Myth: Shopping around for a loan hurts my credit score.
Truth: When you apply for a loan or get pre-approved, the creditor checks your credit report, which shows up as an inquiry to your credit. While too many inquiries to your credit will lower your score, you can shop around for a mortgage, home equity loan, personal loan, or car loan without worrying about hurting your credit, as long as the same kind of inquiries are made within 30 days of each other.
Myth: Earning or saving more money will improve my credit score.
Truth: While earning or saving more money improves your financial situation, your credit score looks at whether you make your payments on time and whether you have a consistent history of paying off your debt, not how much you earn or save.
Myth: Closing an account will "make it go away."
Truth: If you close an account, its status will change, but it will still be listed on your credit report for the next several years. Some information, like Chapter 7 bankruptcy, stays on your credit report for some time.
Myth: I have to pay for my credit score.
Truth: You can get a free copy of your credit report and credit score at least once a year. There are also options to monitor your credit report and report any unusual credit activity, but you may have to pay for those.
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These are general recommendations not applicable to all financial situations. Every financial situation is unique. Further, the suggestions and recommendations contained within the content provided are not an assurance of any future result. Be sure to discuss your specific financial circumstances with a legal or financial expert. Contact us or more information.
