Credit Score Myths and Misconceptions Exposed

| July 15, 2016

credit score mythsOur credit scores are some of the most valuable things that we possess, however, there are so many myths and misconceptions surrounding personal finances and credit scores in particular.

Managing your personal finances can almost be a full time job in itself, which is why we spoke to the personal finance experts over at prepaid mastercard provider icount to tell us about a survey they did to find out exactly what we get wrong when it comes to managing our credit ratings.

The survey results revealed that a quarter of British people admit to not understanding their credit rating fully, which leads us to discuss the most common situations that people think impact their score.

Credit Myths – Experian

Credit is impossible to get if you don’t already have it.When lenders review applicants, they look at four elements of a credit report: identification.

 

Credit Score Myths

Myth: My flatmate or partner’s credit rating will have an effect on mine

Living with people with a poor credit rating will not affect your credit score. Neither will the previous occupants of your address. A joint bank account with a partner could impact you, though.

Myth: I think my name may be on a credit blacklist

A credit blacklist doesn’t exist. The people who lend you credit make their decision based on a number of factors such as information from credit reference agencies.

Myth: I can’t rebuild my credit score

Everyone can do some work to improve their credit score, whether it’s making sure that old bank accounts are closed or making sure every single repayment is made on time, all of these actions can go some way towards improving your credit score.

Myth: I don’t have a degree so I my credit score will always be low

This is a very common myth, but rest assured that lenders don’t look at this when assessing if you are able to borrow.

Myth: More credit cards mean better credit score

This is a very little evidence to support the myth that having more lines of credit will improve your credit rating. However, lenders do want to see evidence of regular and timely repayments, as this proves that you are able to handle your finances well and are not likely to default on any payments.

Top Tip: Try a prepaid card account to enable you to demonstrate your repayments month after month.

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Category: Credit Score

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