10 Credit Myths Debunked
There are a lot of credit theories out there, but while there is some truth to some, most of them are nothing but myths. And we are here to debunk the 10 biggest ones!
1. Age and/or Race Affect Your Credit Score
Thanks to the Equal Credit Opportunity Rights Act of 1976, credit score is not settled by age, race, gender or nationality.
2. Closing a Credit Card Gives You a Clean Slate
There are no clean slates when it comes to credit. You can close the card, but your credit record along with every little thing you’ve done stays there.
3. The Only Thing you need to do as a Cosigner is to Give Your John Hancock
Many people had to find out the hard way that cosigning makes you as responsible for that credit card as is the owner.
4. Credit Scores Are Influenced By Income
Paying your bills on time is clearly more important than income when it comes to credit scores.
5. Credit Scores are Universal
There’s FICO, VantageScore, RiskView and so many others that will calculate a totally different credit score for you.
6. Closing a Credit Card Can Improve Your Credit Score
Unfortunately not, because one less credit card means less available credit for you, which actually decreases your score.
7. Checking Your Credit Score Decreases It
If you check your score through a credit bureau, it will not affect your score.
8. No Credit Cards Means No Credit Debt and a Good Credit Score
Surprisingly, this is not the case. Credit history is a crucial factor in determining your credit score.
9. Paying Off Debt Removes It from Your Credit History
Once you get debt, it is there to stay because Credit History includes negative accounts as well.
10. No Debt Means You Don’t Have To Check Your Credit Score
Checking your credit score at least one a year should be standard protocol, because debt is not the only factor taken into consideration.