Myths About Credit Scores

Myths About Credit Scores

There is a lot of information available about credit scores, however, a lot of customers have misconceptions about credit scores.

Here are some credit score myths:

It Will Take a Very Long Time for your Credit Score to Go Bad

It takes some months to ruin a better credit score. At 6 months past due, your account will be charged-off, which is one of the worst things you may do to your credit score. Multiple charge-offs and collections can totally ruin your credit score.

Credit Is Impossible to Get If You Do Not Have It

When lenders review applicants, they look at 4 elements of a credit report: identification, account history, public records, and inquiries.

If a credit history hasn’t been established, an applicant can want to have somebody cosign or be added as an authorized user on an account. A great choice for those starting to build credit when they do not have a cosigner is a secured credit card, which needs users to put up cash as collateral.

Once a credit history is established, it’s essential to maintain a better record of on-time payments and conservative credit use. It can take the most time for those to start to build credit to see an improvement. Furthermore, their credit history will be evaluated periodically and, provided they’re in good standing, their credit score will increase.

Once A Credit Score Is Bad, You Cannot Rebuild It

A credit report is a credit history, and credit may be rebuilt over time. It will keep a record of all credit that is opened in the customer name. It’ll indicate which items are closed and inactive, but the history remains nonetheless.

Late and missed payments can stay on somebody’s report for up to 7 years. Rebuilding credit means paying on time, looking for good credit options, and learning more about money or credit. Furthermore, the longer credit history is without negative info, such as late payments, the good. The older negative info is, the less important it becomes.

If you Checking a Credit Report, then it Will Hurt Your Score

If customers access their own credit reports, it doesn’t have any impact on their credit scores. Reviewing a credit report results in what’s known as a soft pull, and a soft inquiry. Soft inquiries have no impact on your credit score as they’re not considered as a factor in credit scoring models and are not disputable.

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When a customer applies for credit, the lender will review the credit report of the applicant, and a hard inquiry will be added. Hard inquiries are shown to other lenders because they can represent new debt that does not show on a credit report as an account. Hard inquiries can affect credit scores. Everybody should check their reports at least annually. It is part of better credit management.

You Have to Make some Money to Have a Good Credit Score

Your income and bank account balances are not direct influences on your credit score.

How much money you have indirectly affected your credit score? in your credit score, income is not a factor. However, bill payment habits do factor into your credit score. No matter how much money you have, paying your bills on time is the great thing you can do for your credit score.

Every Person Has One Credit Score

Every person has many credit scores because there are many different credit scoring models. And for every credit scoring model, there are 3 different credit scores for every of the major credit bureaus.

The Credit Score Is the Same that a Lender Will See

The credit score you get online, whether free and purchased, is an educational credit score and not the similar credit score your lender is going to use. While the educational credit score can give you an idea of credit health, you cannot take for granted that you will be approved based on that score.

Credit is The thing that Got Americans into the present Financial Mess

Spending too much is what may get people into financial trouble. Credit is a tool that is beneficial if it is used wisely, but if it will be misused, then it will get people into trouble. Everybody should set a budget to make sure they use their credit wisely and that they do not overspend.

There is a single credit score

There is not one single credit scoring formula that applies to all customers in all conditions. There are more than lots of scoring models in use in the credit marketplace. A customer could therefore have dozens or even many different credit scores.

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Lenders as well as other people check your credit score, and your credit history in a different way, giving different weight to many factors.

The Government Owns the Credit Bureaus

Credit reporting agencies aren’t owned by the government, though there are various laws that regulate how they operate.

The Credit Bureaus Report People as Having Either Good and Bad Credit

Credit reporting companies don’t make judgments about the info in credit reports. They compile info that’s provided directly and voluntarily by customer lenders. The info is probably comprised of credit cards, home or auto loans as well as other monthly payments. Lenders use that info to help them assess the risk of lending to an individual.

Getting Married Will Merge Your Scores

There’s nothing like merging credit scores in reality. No matter what your marital status is, credit scores are determined based on individual financial behavior. If you have joint bank accounts, then it will not change anything w.r.t your credit history and score.

Debit Card Builds a Credit Score

Debit cards don’t contribute to building your credit history and getting a credit score. Since a debit card is a tool to access your savings account balance and doesn’t cover the concept of credit, any transactions done with a debit card won’t be considered to build your credit history and credit score.

You avail a credit card as well as a loan to open your quota of credit history. Once your credit history is built, your credit score will be generated. However, it’ll take some months to move from NA to a score.

credit repair consultantIs your credit score giving you a headache?

If you have uncertainty about your credit score and or need help to improve your credit score, you’re in the right place. The YMA Wealth Management Group has a team of experts dedicated to credit repair called Masters Credit Consultants. Our goal is to help you reach your goals whether it’s getting approved for a home loan or simply focusing on removing negative items from your credit report. We’re a one-stop credit repair company.

Give us a call today: 1-800-381-9206

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