5 Credit Score Myths Debunked
With more people becoming aware of the importance of their credit scores, there are bound to be some myths and other misinformation out there that can cause informed, reasonable people to make mistakes that can harm their credit. Most people understand very well that credit scores can save or cost you potentially tens of thousands of dollars on a mortgage and other types of loans. Nevertheless, myths about credit scores persist, and the only way to dispel these myths is to be informed.
To that end, here are some of the more common credit score myths:
You only have to check one credit score.
Big myth here. Because your credit scores from each of the three credit reporting agencies can vary significantly, it's very important to get your scores from all three agencies.
- If you make more money, your credit scores will improve.
Not true at all. You could win the lottery today and still have lousy credit scores a month from now. You increase your credit scores by managing credit responsibly and paying down debts to improve your debt-to-credit ratio. If you get your debt-to-credit ratio down to 15 percent or less, your credit scores will improve significantly, so pay down your debts.
- The credit card offers you get in the mail hurt your credit scores.
No matter how many credit card solicitations you receive in the mail, they won't affect your credit scores at all as long as you don't respond to them.
You combine credit scores when you get married.
When you get married, your credit scores remain yours and only yours — even if you open new, joint lines of credit with both your names on them. If you do open joint accounts, though, your combined credit management habits will affect both your scores and your spouse's scores, so make sure that at least one of you is paying those bills on time each month.
- Shopping around for a better loan hurts your credit scores.
If multiple credit checks negatively affect your credit scores, then shopping around for a better interest rate must be a bad idea, right? Not so! If you're looking for a line of credit for a new car, house, or other major purchase, these types of inquiries don't hurt your scores as long as they're the same type of inquiry and they're made within 14 days of each other. Inquiries made within a two-week period count as one credit inquiry. However, this bunching of inquiries doesn't apply to credit cards, so be careful if you're shopping for a new card.
These and other myths about credit scores can cause careful, responsible people to make mistakes that hurt their creditworthiness. Conducting your own research and staying informed are the best ways to prevent these and other myths from hurting your credit scores and costing you money. Just make sure to check your credit reports and credit scores often, look for and take action against any errors that appear on your reports, and proactively manage your credit. Proper credit management can save you a lot of money over time.
Read More About Credit Scores
- How missed and late credit card payments affect your credit score
- Your Credit Score: How Your Credit Cards Influence It
- The Relationship between Credit Scores and Age
- Credit Scores vs. FICO VantageScores
- Why Each Credit Bureau Has Its Own Credit Score
- Medical Bills Don't Have to Ruin a Credit Score
- Chapter 7 or 13 Bankruptcy Can Affect Credit Scores
- Ordering Your Credit Score From a Credit Bureau
- What is a Bad Credit Score?
- Factors That Damage Your Credit Score
- What Is a Good Credit Score?
- Credit Score Myths
- How Credit Scores Are Calculated
- Why You Need to Know All Three Credit Scores
- What Are the Three Credit Bureaus?
- How Credit Scores Affect Insurance Premiums
- Student Habits That Kill Your Credit Score
- Store Credit Card Application Could Damage Your Credit Score
- International Credit Score
- What A Credit Card Balance Does to Credit Scores
- How a HELOC Affects Your Credit Score
- Medical Credit Score
- Your Credit Score May Be Worse Than You Think
- FICO - What is Coming in 2009
- Credit Score Ranges
- Five Parts to Your FICO Credit Score
- How Corporate Cards Affect Your Personal Credit Score
- Who Wants to Know Your Credit Score
- Credit Rating - How Your Credit Gets A Score
- Credit Line and Your Credit Score