7 Credit Score Myths You Should Stop Believing – There is no denial about the iniquitousness of credit cards and the myths that follow are equally omnipresent. Since not all of us have a banking background, understanding the complex subject of credit cards could be supremely troublesome.
At one point or another, we all might have passed on a misbelief about credit cards, which needs to stop before it turns into a serious issue. We are, therefore, going myth-busting on the major credit card misinformation.
Myth#1: Low Income Is Equivalent to Not Having a Great Credit Score
The amount of salary you earn is irrelevant to how great your credit score is. Your income does not affect your credit score, as it is not a part of your credit reports. Your income reflects your ability to afford a credit card and that too is only assessed at the time of loan or credit card application.
Myth#2: Couples End up Having Joint Credit Reports
There are several things that couples must share after the “I do”, but a joint credit report isn’t one of those. Marriage is only a union of two people and not their credit scores, thus having no effect on credit reports. Even when you apply for a loan as a couple, your individual credit histories are considered.
Myth#3: Credit Score is Affected if Checked
Another myth you must stop believing is that checking your credit score might affect it negatively. Inquiring about your credit is a fruitful habit that can save you from possible threats. This myth comes from a confusion between hard and soft credit checks. Personal credit checks fall under the soft credit checks having no impact on your score, whereas hard inquiry can lower your score.
Myth#4: There’s No Effect on Credit Score Approaching Your Credit Limit
It certainly will! Maxing out your credit cards and even going over your limits shows you’re probably struggling financially. Moreover, your account can be put on default in case of exceeding the credit card’s limit, which will be noted on your credit report. Thus, it is always a responsible move to pay off your balances timely and keep a check on your credit limit.
Myth#5: Bad Credit Score Can Never Change
Only if you continue making decisions that could hurt your credit score! If you work on building a good credit history, your credit score will surely improve over time. The details of account defaulting, or bad payment history usually stay for 7 to 10 years on your credit scores. Adapting to better financial habits can certainly help you get out of hot waters with time.
Myth#6: Your Debit Card Affects Your Credit Score
Debit cards are not responsible for building your credit scores. A debit card is merely a tool to access your savings account and has no concept of “credit” involved, thus not affecting your credit score in any way. Your credit card alone decides your credit score and nothing else.
Myth#7: A Credit Card Not in Use Must be Cancelled
Normally it is expected of us to unsubscribe to products and services not in our use anymore, however that isn’t the case with credit cards. Cancelling a credit card would delete all your credit score’s history, resultantly you will have less credit score on your credit record. It is always better to keep your credit card open to be able to access your account’s statistics. In case of more clarity and queries on other financial matters, it is always preferable to contact a financial advisor.
About Time You Get Your Facts Straight
Stop believing all the myths associated with credit cards, as you might be unaware of the fees or interests, you’re paying unknowingly or even holding yourself back from good rewards. Better to dig a little deep and then make your decision.