Top Credit Myths That People Should Avoid
Your credit report is like your transcript of record that provides institutions, which include lenders and employers, an insight into how well you use your credit. Just like a transcript enumerates your grading history, your credit report details your payment history as well as accounts opened; and at the end, you get your final grade point average, that is your credit score in this case.
So did you get a summa cum laude-worthy credit score or did you find yourself almost failing the course? A lot of buzz is going on around about what positively affects your credit score and credit report. However, not all of them are true. Thus, you should be aware of these credit score myths. Here are some of the top credit myths that you should avoid.
Top Myth #1: I make big bucks! Therefore, my credit score is superb!
For so many people, they believe that earning big is the key to making their credit score look pretty. However, this is not necessarily the case. Yes, it is true that your high salary can help you make your credit score look good, but credit score does not solely depend on your salary or position in the company. Even if you get a fat pay cheque every month but your credit report and credit score is not good, then you would not be able to get that low interest rate for that loan you applied for and may even get rejected for other loan requests you made. Regardless of how much money you make, your creditworthiness depends on your credit report not on your salary pay slip.
Top Myth #2: I always pay on time. Thus, my credit score is good.
This is one of the dangerous myths about credit reports that you should not accept as a fact. A credit report that shows you making all your payments on time is a good start. However, this does not comprise everything that influences your credit score. Your credit score is an evaluation of how well you can pay off your debt not just for the meantime, but in the future as well. Thus, if you have an overwhelming debt the size of Mount Everest, it will not be long until you struggle or fail to pay your monthly dues. It is important to make your payments on time and stay out of debts that you are unable to pay in the future to ensure that your credit score will be in good shape.
Top Myth #3: I wont check my credit report; it will just lower my credit rating.
One of the classics of credit check myths is that checking your credit report will hurt you. However, the opposite is true. When you review your credit report for your own personal use, it will not affect your credit score. This is classified as a soft credit pull. On the other hand, a hard credit pull in which lenders make an inquiry on your credit when you apply for a new loan can affect your credit score.
These are just some of the top credit myths that you need to know. Dispelling credit myths could be a start for you to recognize ways to keep your credit score in good shape.
So did you get a summa cum laude-worthy credit score or did you find yourself almost failing the course? A lot of buzz is going on around about what positively affects your credit score and credit report. However, not all of them are true. Thus, you should be aware of these credit score myths. Here are some of the top credit myths that you should avoid.
Top Myth #1: I make big bucks! Therefore, my credit score is superb!
For so many people, they believe that earning big is the key to making their credit score look pretty. However, this is not necessarily the case. Yes, it is true that your high salary can help you make your credit score look good, but credit score does not solely depend on your salary or position in the company. Even if you get a fat pay cheque every month but your credit report and credit score is not good, then you would not be able to get that low interest rate for that loan you applied for and may even get rejected for other loan requests you made. Regardless of how much money you make, your creditworthiness depends on your credit report not on your salary pay slip.
Top Myth #2: I always pay on time. Thus, my credit score is good.
This is one of the dangerous myths about credit reports that you should not accept as a fact. A credit report that shows you making all your payments on time is a good start. However, this does not comprise everything that influences your credit score. Your credit score is an evaluation of how well you can pay off your debt not just for the meantime, but in the future as well. Thus, if you have an overwhelming debt the size of Mount Everest, it will not be long until you struggle or fail to pay your monthly dues. It is important to make your payments on time and stay out of debts that you are unable to pay in the future to ensure that your credit score will be in good shape.
Top Myth #3: I wont check my credit report; it will just lower my credit rating.
One of the classics of credit check myths is that checking your credit report will hurt you. However, the opposite is true. When you review your credit report for your own personal use, it will not affect your credit score. This is classified as a soft credit pull. On the other hand, a hard credit pull in which lenders make an inquiry on your credit when you apply for a new loan can affect your credit score.
These are just some of the top credit myths that you need to know. Dispelling credit myths could be a start for you to recognize ways to keep your credit score in good shape.
Source...