There are many credit report and credit score myths all over the internet and also shared among family and friends. So many of these myths continue to pop up so I felt it warranted an article that quickly identifies and debunk these myths.
Here is a simplified list of 28 persistent credit report and score myths:
- Checking your credit reports lowers your score. – False
- You have to pay to access your credit reports annually. – False
- Credit bureaus report people as having good or bad credit. – False
- Your income impacts your credit score. – False
- The credit bureaus are government agencies. – False
- Credit reports are public information. – False
- Credit is hard to establish. – False
- Paying with cash helps credit scores. – False
- Scores should be the same number for each report. – False
- Debit cards, prepaid cards, or ATM cards help credit scores. – False
- Education levels can affect credit scores. – False
- There is only one credit score that lenders use. – False
- Once your credit is bad, it’s impossible to fix it. – False
- Paid off delinquent amounts are automatically removed from a credit report. – False
- You’re not accountable to pay bills on time during a dispute. – False
- Closing old accounts help your score. – False
- The best way to improve credit scores is to pay off the balances entirely and close credit cards. – False
- Closing revolving accounts improve your credit score. – False
- Closing accounts with late payments will remove negative information in your report. – False
- No debt means higher credit scores. – False
- Credit repair companies will increase your credit score. – False
- Married couples share the same credit report & score. – False
- Divorce never impacts credit scores. – False
- You should wait until you’re much older to start a credit history. – False
- It’s better to carry a balance on credit cards to have higher credit scores. – False
- My employer can see my credit score. – False
- Employers use your credit score for job offers. – False
- High credit scores mean you’re rich. – False
There’s a prevailing idea in personal finance circles that credit isn’t important and we shouldn’t focus our time and attention on them. I wish that were true. Although I can agree that indebtedness can lead to financial stress, credit is a fact of life in the US.
Without credit, it’s nearly impossible to rent an apartment or hookup utilities or get cellphone service. Fortunately, some things are changing but overhauling a system built on credit will take time. So it’s important that you understand as much as you can about credit reports and scores.
Learn more about credit reports and scores with our 12 FAQ on credit and 10 common credit score related question to ask yourself.
Now, it’s your turn. Do you have any other myths you’ve uncovered?