Credit score is the question that many people cannot really answer. A few of us know how it is really calculated and what it has impact on. But it should not be so. It is better to look deeper into this question.
That is why I have collected here some myths about the credit score you have obviously come across.
The Myth #1 – Your Credit Score will become worth if you do not carry a Balance
This one scares a lot of people. A vast majority of us thinks that carrying a balance can help you to make your credit score higher. However it is not true at all. You will for sure have an interest rate on your loan or credit that is bigger than 0%.
So you should pay back your debt fully and regularly, instead of carrying a balance. That will help you to avoid late charges as well.
The Myth #2 – It is not Good for Credit Score to Earn Little Money
Most people believe that it is better to have high income. Of course you should better earn more, but it has nothing to do with your credit score. We all know a lot of millionaires who cannot return money on time and who do not cover the interests well. But there are still many ordinary people with low income who are very responsible. I believe it is just a trait of character of the person, which does not allow him or her to cheat.
The myth #3 – Checking your Own Credit Score can make it Lower
I used to believe this myth; however it is not true again. If you use FICO or Credit Sesame, and the same companies to have a look at your credit score, this will not make it lower as this is considered to be a “soft pull”. But if you want to check it using a loan you have taken, your credit will obviously be lowered, because it will be a “hard pull”.
The myth #4 – Your Age is Important
I have heard that many young people are afraid of this. But your age cannot make your credit score lower. There are many examples of young people who have a wonderful score, they might have their own business or just a good work. So it does not have anything in common with the age. The only thing I can agree is that you do not have a long credit history if you are young, that may be important for some credit unions or banks. But it is always possible to take a cashadvance, applying for which you have just confirm your solvency, but not show your credit history.
Do you know some other credit score myth? Do you still believe any of them?