There is definitely something you have to know about credit score! Some people are too cautious about it, others don’t take into account important details. Still, there are people, who take ridiculous credit score myths seriously.
Often instead of learning how to actually improve a loan application, borrowers choose to believe in financial myths. Right now you should familiarize with these myths that can change your representation about this magic three-digit number.
Myth 1: Everyone Can Apply for Credit Report for Free
When you apply for a personal loan or any other kind of long-term loan, you would like to know your credit score. Some people are sure that one of the three main credit bureaus once a year provides free credit report. As you understand, it’s a hilarious myth. If you want to know your credit score, you have to pay for it.
Myth 2: It’s Possible to Share Credit Score with Consort
Some spouses are sure that they can share their credit score. It’s possible in the certain cases when a couple has a joint debt but it still doesn’t mean that you have the same credit score for all your financial operations. Otherwise, any bank won’t open one credit score for the family.
Some couples decide to apply for a joint loan, as it was mentioned before. Usually, they choose to formalize one person as a liable for payments.
When you both divorce or stop living together, a liable person can stop paying the debt off. In this case, your credit score will still be affected by missed payments. All you have to do is to apply for a bank and stop being part of the debt or talk to your spouse to solve this situation.
Myth 4: Only One Credit Score Is Possible
Until three main credit bureaus – Equifax, TransUnion, and Experian – maintain clients, your credit score can be different. It doesn’t differ much – if you have an excellent score, it will differ from one agency to another up to several points.
The explanation is simple – each agency uses different software and calculating systems. That’s why your three-digit number is different. Still, it won’t affect loan approval as lenders usually ask for credit reports from different agencies.
Myth 5: Reputable Job Guarantees Good Credit Score
Only your responsible attitude, on time payments, not the big amount of loan requests, and many other factors but not a job can guarantee a good credit score. You can be rich and have a promising job but if your credit habits are bad, it will reflect on your credit score.
Myth 6: Bankruptcy is a Verdict for a Good Credit Score
If you got bankrupt, it will reflect on your credit score. Negatively! It can take 5-7 years to clean your credit history from this fact. After that, it’s possible to start everything from scratch. Yes, it will be more likely to get a loan eventually but you have to wait and show up responsible and dedicated attitude.
Myth 7: Having no Debt Is a Key for an Excellent Score
Being debt free is excellent. It definitely contributes a good credit score but doesn’t guarantee it. A credit score considers your credit behavior. That’s why it’s important to be cautious about any financial operations.
Reaching or maintaining a good credit score is complicated but when you know what you have to be aware and where you are wrong, it’s becoming easier!