The answer to an algorithmic equation is a number that can’t be changed. Basically, it’s just a numerical value. When you see it, you may be shocked or horrified, but the math is unassailable. In spite of this, many people will continue to debate it and concoct absurd conspiracy theories.
We are, after all, referring to credit scores. Using variables such as payment history, total debt, oldest account date, and credit utilization ratio, they are calculated. These aren’t “opinion” topics at all; they’re simply numerical data. It’s because of these values that your credit score is bad.
Myths about credit scores that are widely believed
Paying off your credit card debt with a debt consolidation loan can help you improve your credit score. You’ll still be required to make loan payments, but the interest rate will be lower now. That’s a fact, not a fabrication. The following is a short list of common misconceptions about credit scores:
A bad credit score is permanent.
Consider your credit score to be a living, breathing being. As long as you’re making (or failing to make) payments to your creditors, things change. As your credit usage and payment history change, this number will change as well.
You’ll lower your credit score if you check your credit.
The credit reporting agencies will provide you with a free credit report. Almost all credit cards have some kind of link to your credit score. Checking does not affect your score and should not cost you a penny.
It’s only the rich who have good credit.
For a good credit score, you don’t need money. When it comes to getting a score, it’s all about how much money you spend, not how much money you have. Many wealthy people have bad credit, and your income has no bearing on your credit score.
Couples who are married combine their credit scores.
Each spouse has their own credit rating. Their individual scores won’t be affected if they mismanage joint accounts and lower each other. People do not combine their scores.
You can raise your credit score by using prepaid cards.
A prepaid or debit card does not have a credit reporting component. Credit reporting agencies and credit bureaus don’t see them because they’re treated like cash.
A good credit score requires a lot of debt.
A credit card account is a great way to build credit if you use it to make small purchases and pay the balance in full each month. With this method, you’ll never accrue debt or be subject to interest charges.
Credit reports are checked by employers.
However, it is against the law for employers to run a credit check on their employees. You need to know the difference in order to avoid misunderstandings. The media frequently misrepresents this. Your credit score is yours alone.
Sadly, these myths often lead people to mismanage their credit and harm their credit score. Don’t fall prey to this sleight of hand.
Interesting Related Article: “What Is a Good Credit Score? How To Improve Your Credit Score?“