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An illustration of credit score gauge inside a magnified glass
An illustration of credit score gauge inside a magnified glass
An illustration of credit score gauge inside a magnified glass
published april 6, 2023

Don't let misinformation hold you back.

We’re here to make sure you know what’s a myth and what can really help you.

First thing’s first, what is a credit score? A number ranging from 300-850 that measures your credit worthiness. The higher the score, the better.

Myth: Checking your credit report lowers your score.

Reality: That isn’t always the case. Checking your own credit score is considered a “soft” inquiry, which doesn’t affect it. “Hard” inquiries, like when you apply for a credit card or loan, will lower your score temporarily.

Myth: On-time payments are all it takes to keep a high credit score.

Reality: While your payment history is a big factor for your score, there’s more to it. It takes into account amounts owed, new credit, the mix of credit types you have, and credit history.

Myth: Making the minimum payments on loans is better than paying off your credit card balance every month.

Reality: Paying the minimum every month will keep your account current, but it’s not a great long-term solution. Paying more than you’re required to, including paying your balance off monthly if you can, will improve your credit score. It will also save you money on interest.

Myth: Credit is only important when you’re asking to borrow money.

Reality: You can add landlords, service providers, insurance companies, and potential employers to the list of those who may want to check your credit.

Myth: Moving states give you a clean credit slate.

Reality: It doesn’t matter where you’re going, you better save room in your suitcase for your credit score. It’s coming with you no matter what.

Myth: You can’t correct credit report errors.

Reality: You can, and you should correct errors when you see them on your credit report. Contact the credit reporting agency/company and lending company that provided the information to set things straight.

Myth: Late payments disappear after three years.

Reality: Late payments disappear after three seven years. Some things don’t even fall off for up to 10 years—or indefinitely when it comes to student loans.

Myth: All types of credit are the same.

Reality: There are different types of credit. You can have installment loans like mortgages or car payments and revolving credit like credit cards.

Myth: Using a debit card responsibly and managing your personal accounts will help build credit. 

Reality: Debit cards and personal accounts aren’t forms of credit. That means they won’t show up on a credit report or influence your score. While maintaining a good personal account won’t positively impact your credit score, not maintaining your account – going negative, getting charged off, getting sent to collections, will.

Myth: Co-borrowing or co-signing a loan won’t affect credit.

Reality: In most cases, both parties are on the hook to make sure everything gets paid. It’s important to understand loan contracts and the difference between co-borrowing and co-signing. Check out what a credit report looks like

To sum it all up, you can improve your credit score by making sure your bills are paid on time, you lower your balances, and only take out new lines of credit when you need to. 

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