5 Myths About Your Credit Score – Debunked

Many of us worry about our credit scores and the factors that are taken into account when calculating them. A lot of what we think we believe, doesn’t in fact affect our credit ratings in the way that we think. This is particularly important to know when we’re looking at bigger financing options, such as acquiring a mortgage or startup business finance for example.

Community First have put together this fantastic infographic looking at 5 of the most commonly believed myths, along with how they actually affect your credit rating.

5 myths

Source: Community First

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Myth #1: There is only one way to measure your credit score

False!

There are actually dozens of different credit scores and that is why the score you can check yourself may not match what a bank or lender gets when they pull your credit. Although most use FICO, it is not always guaranteed.

Myth #2: Secured credit cards can fix your credit quickly

False!

Secured credit cards will help your credit, but if you have negative information still on file it can take a while for the good to outweigh the bad.

Myth #3: Once you have good credit, it will continue to get better

False!

It is actually harder for someone with a score of 800 to gain points than someone with a lower score.

Myth #4: Closing your old accounts will help your credit score

False!

This is now always the case. Older accounts with a good payment history still help your overall credit score, even if they have been paid off.

Myth #5: Only credit cards and loans are counted towards your credit score

False!

Unpaid bills and bills that are paid late also negatively affect your credit. In some places, even things like unpaid traffic tickets, lapsed contracts that were unpaid (like a gym membership or contract for TV service) and library fines can go on your credit.

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