5 Credit Myths You Shouldn't Fall For
If you're in debt then you're not alone. The average American has a debt of about $51,900. This includes auto loans, student loans, credit cards, home equity lines of credit, and mortgage loans.
While building your credit and getting out of debt might seem like a dream, there's hope. It might seem difficult to separate facts from credit myths, but this guide has you covered.
This article will take a look at the different myths out there that are easy to fall for. Read on to explore these myths, and avoid being duped today.
1. Checking Your Score Will Hurt Your Credit
The cost of servicing US government debt in 2020 was $479 billion. One of the credit score myths floating around today is that it'll hurt your score to check your report. First, it'll only impact your score if it has to do with a credit application you submit.
This includes applying for a credit card or loan. It goes up in this case due to adding debt to your current amount. Taking a look at your credit report won't make your credit drop.
2. Credit Bureaus Give You Bad and Good Scores
While credit bureaus will collect information in order to give you a score on your credit report, it doesn't say whether the score is good or bad. The lender decides whether your score meets what they're looking for. Even if you have a high credit score, if you don't have assets or a job, it won't mean as much.
3. Your Income Affects Your Credit Score
While lenders take a look at your salary and credit score, they're not combined. Your income doesn't show up in your credit history.
What's included in the length of your credit history, payment history, and amount owed. It can also include the different credit products that you have.
4. You Don't Need to Worry About Your Credit Score
One of the common credit score myths out there is that you don't have to worry about your credit score until you're older. Once you turn 18 years old, that's when you need to start looking into your credit score to avoid being credit invisible. Credit invisible is a term for those who have little to no credit history.
5. It's Best to Close an Account That's Paid in Full
Once you pay off a credit card it's not always the best choice to close it. Doing this can impact your credit utilization rate.
This is the amount of credit you're using compared to what you have available. The average of your credit account will impact your credit utilization as well.
Exploring the Different Credit Myths Out There
Now that you've explored this guide on the different credit myths out there, you should have a better idea of what to expect. Whether you're credit invisible or have bad credit, we can help. Contact us, and we'll go over how you can get approved for a loan today.