Having a good credit score is one of the most valuable things you can have. It can help you to secure financial assistance and save you thousands of pounds on the cost of credit in the process. On the other hand, if you have a bad credit rating, it can really limit your ability to borrow altogether. This is the simple truth regarding credit scores, but hidden in the middle is a wealth of speculation and untruths. There are countless myths that are bandied about, and below we reveal more about the hearsay that you definitely shouldn’t be listening to.
You can hide outstanding debt by moving credit card balances around – A lot of people try to mask their debt by simply moving their balances around, so it looks like they are making regular payments. At the end of the day, the full total is going to appear on your credit score, so this really won’t make any difference. You can’t hide your debt, but you can pay it off. Here are some simple changes you can make to dig yourself out of debt.
People with more money have better credit scores – How much money you have does not impact your credit score. It is all about keeping up to date with payments. If someone rich misses payments on their account, their score will be negatively impacted too.
You should have as many credit cards as possible – There is a common assumption that the more credit cards you have, the better, as you can show you are good at paying back debts. This isn’t wise, as you are simply putting too much pressure on yourself by having too many financial commitments. There is no definitive number of accounts that will lead to the perfect credit score; you simply need to show that you can keep up with all payments and manage your credit well.
A poor credit score is stuck with you for life – It does not matter how bad your credit rating is, you can improve it. There are numerous ways to do so, including joining the electoral role, taking out a credit card for bad credit, and keeping your address information up to date. You should also check out USL4U guaranteed loans for bad credit – by making regular payments on time, your score will improve.
Your education will impact your credit score – This is simply not true. Education has no bearing on your credit rating, and it is not part of the report. Also, a creditor’s scoring system cannot use religion, national origin, marital status, gender or race under the Equal Credit Opportunity Act.
Old debts don’t matter – In fact, old credit agreements will stay on file for approximately six years, so they do matter. If you genuinely did not realise you had an old debt, you do have the option to request to put a ‘notice of correction’ on your file, i.e. you can explain the circumstances surrounding the mark.
There is a credit blacklist – Lastly, perhaps the biggest myth of them all! There is no credit backlist. Lenders use an array of information to make their decision, combining any details you supply on your application form with data from credit reference agencies.