While information on credit scores is more readily available than ever, so are numerous misleading claims. Believing credit score myths can prevent you from taking the right steps to improve your credit. In fact, some of these are outright ridiculous! Since a good credit score provides much more financial flexibility, American Credit has compiled this list of credit score myths—along with what you should know.
The Most Ridiculous Credit Score Myths Explained
Myth: You’ll Always Be Stuck with a Bad Credit Score
That depends on the choices you make and your credit usage habits. Even if you’ve missed payments or have high credit card balances, you can improve your credit score by paying on time and lowering your credit utilization rate. The goal is to manage your credit well. Most negative information will be removed from your credit report after seven years, but negative marks have less of an impact over time.
Myth: My Credit Score Will Drop by Checking It
You can get free annual credit reports without hurting your credit score. Many credit cards offer a credit check tool online so you can look at your credit score whenever you want. It’s actually a good idea to review your credit regularly; you can track spending habits and find potential mistakes and inaccuracies.
Myth: A Good Credit Score Will Stay That Way
This credit score myth is simply not true. A good credit score could be ruined in just a few months if delinquent accounts go into collections, or your account gets charged-off. To believe otherwise is ridiculous. Multiple charge-offs or collections can have devastating long-term consequences.
Myth: There’s Only One Credit Score You Need to Consider
There are many scoring models and new ones are created all the time. While you might see one score, your lender may see another. Different scoring models may be used for certain loans as well. It’s completely normal to see different numbers.
Myth: You Can Boost Your Credit Score by Canceling an Unused Credit Card
The opposite is true, because closing an account reduces your available credit, increasing credit utilization, and can shorten the length of your credit history. The effect is usually brief. Your credit score can rebound in a couple of months, but canceling a card won’t help your credit score.
Myth: You Need to Be Wealthy to Have a High Credit Score
Your income doesn’t impact your credit score. It also doesn’t matter how much money you have in the bank. But there could be indirect effects, particularly with bill payment habits. As long as you pay your bills on time, you can have a decent credit score.
Myth: Shopping Around with Lenders Will Lower My Score
Hard inquires can lower your credit score. But if you shop around for auto or home mortgage loans (or even credit cards) to find the best rates/terms, multiple inquiries will count as one if done within 14 to 45 days. The timeframe for each product differs.
Myth: Credit Scores Are Merged When People Get Married
Even after getting married, each spouse has their own credit score and credit history. If you or your spouse has an individually held account, it will continue to affect only that person’s score. If you have a joint account, both your credit scores will be impacted by the choices you make.
Myth: You Can Raise Your Score by Disputing an Account
Inaccurate information can lower your credit score. But just by disputing it, you aren’t guaranteed the information will be deleted, or that your credit score will go up even if a decision falls in your favor.
Myth: You Can Hire Someone to Fix Your Credit Quickly
A legitimate credit repair company can help fix mistakes or manage disputes. However, the only way you can fix your credit is to manage your credit well. Paying on time, keeping balances low, and applying for only credit you need over time can strengthen your credit score.
Need Help with Credit Repair? Contact American Credit
As one of the leading credit repair companies in Los Angeles, we can help raise your credit score by disputing negative information via a pre-litigation process. Your credit score can affect eligibility for a mortgage, auto loan, or even approval of an apartment lease. But we can help repair your credit. For a free no obligation credit consultation, call 855-270-5109 today.
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