5 Myths About Your Credit Score

Your credit score is one of the most important pieces of information about you. It can affect your ability to get a loan, a mortgage, or even a job. But what actually is a credit score, and how do you improve yours? Here are five common myths about your credit score debunked.

Checking your credit score will hurt your credit rating

There are many myths about credit scores circulating online and in person. One of the most common myths is that checking your credit score will hurt your credit rating. This myth likely originated from the fact that credit inquiries can negatively impact your credit score. However, credit inquiries only make up 10% of your credit score, so Checking your credit score will not have a significant impact on your credit rating. In fact, checking your credit score can actually be beneficial as it can help you identify any inaccuracies or fraudulent activity on your report. Additionally, monitoring your credit score can help you catch any potential red flags that could indicate identity theft or fraud. Ultimately, there is no downside to checking your credit score regularly, so don’t be fooled by this myth.

You need to have a lot of debt to have a low credit score

There are many credit decision platform that use credit scores to help lenders make credit decisions. A credit score is a three-digit number that lenders use to decide whether to give you credit and what interest rate to charge. A high credit score means you’re a low-risk borrower, which could mean you get a lower interest rate on a loan. A low credit score could lead to a higher interest rate and could mean you won’t get approved for a loan at all. But there are other factors that go into credit decisions, so even if you have a low credit score, you may still be able to get credit. There are also other things that can affect your credit score besides how much debt you have, such as your payment history and credit utilization. So don’t let myths about your credit score stop you from applying for credit.

Closing old accounts will help improve your credit score

One common myth about credit scores is that closing old accounts will help improve your score. However, this is not the case. In fact, closing an account can actually have a negative impact on your score. This is because part of your score is based on the length of your credit history. Therefore, closing an old account will shorten your history, which can lead to a drop in your score. Additionally, closing an account can also increase your credit utilization ratio, which is another factor that contributes to your score. Therefore, it’s generally best to keep old accounts open and active, even if you’re not using them. By doing so, you can help to improve and maintain a good credit score.

Credit scores are the same all over the world

There’s a lot of misinformation out there when it comes to credit scores. One common myth is that credit scores are the same all over the world. In reality, credit scoring systems vary from country to country, and what may be considered a good score in one country may not be seen as favorably in another. Another myth is that you need to have perfect credit to get a good interest rate. While it’s true that having a higher score can give you access to better rates, there are plenty of other factors that lenders will consider when making decisions about interest rates. So don’t despair if your score isn’t perfect – there’s still a good chance you can get a competitive rate.

Employers check credit scores before hiring new employees

There are many myths about credit scores, and one of the most common is that employers check credit scores before hiring new employees. While it’s true that some employers do consider credit scores as part of their hiring process, the vast majority do not. In fact, federal law prohibits employers from using credit scores to discriminate against job applicants. So, if you’re worried that your credit score will prevent you from getting a job, rest assured that it’s not likely to have any impact on your employment prospects.

The five credit score myths we’ve debunked probably surprised you. Your credit score is one of the most important numbers in your life, and it impacts everything from your ability to get a loan to how much you pay for car insurance. It’s time to take control of your credit rating by understanding how it works.

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