Three Common Credit Score Myths
If you search for “credit score” on any Internet search engine, you will find page after page of information. The downside to this is that you may miss out on quality knowledge and instead be left with half-truths and myths, which will do more harm than good.
Be Careful of What You Read on a Screen
While we always encourage people to read and do their own research, we also advise people to take caution on what they can trust and what they should junk. There are many credit score sites out there that are compiled by unqualified contributors. Exercise caution and exercise your better judgement before you trust every single word that shows up on your screen.
Junking the Myths
Based on our experience with separating fact from financial fiction, here are three of the most common myths that are well…myths. Avoid them at all costs:
Myth #1 – For a good credit score, borrow money.
We don’t know how this “expert credit tip” started or where it began; all we can say is trash it. Period. Come to think of it, the very notion of accruing more credit for healthy credit just doesn’t make sense. There are many people out there who think this is a viable strategy for a good credit score. It is not. Agreed, there needs to be some activity on your credit report every month, but this does not in any way mean borrowing money.
Myth #2 – A higher credit score can be achieved with more savings.
In theory, this idea sounds like gold dust. Save, save, and you will get a better credit score. We apologize for the bad news, but your credit score is not about how much you save; instead, it is about how you spend. The reason being is that FICO’s scoring algorithm considers spending and not saving. The good news is that some lenders may consider your savings before accepting your loan or mortgage application.
Myth #3 – All the credit scores are all the same.
This is an easy one to fall into, and we don’t blame anyone who does. The fact is that each credit bureau comes up with a credit score, applying their specific equation. This is a closely-guarded secret. The result: the score you purchase online may not be the true FICO score and…wait for it…every FICO score you do purchase may not be the one the lender checks.
There are many credit myths out there that are simply untrue. If you’re interested in learning the right information about credit and credit repair, look no further. We provide factual information about the industry.
At Action Credit Repair, our experts will provide a personalized credit consultation, an audit of your credit history, and offer solutions to all of your credit obstacles. Contact us today to speak with an experienced professional: Call 518-945-2299 or email [email protected].