5 Bad Credit Score Myths You Probably Believe
Credit scores are incredibly important in order to do a number of things: rent an apartment, get approved for a mortgage, car loan, or business loan, and even to get a job. But as important as credit scores are to almost every adult who wants to live a full and rewarding life, many of us still don’t understand the basic facts about how credit reports work and what a good or bad credit score really means.
Here are five myths about bad credit that just won’t seem to go away. How many of them have you spent your life believing?
- A bad credit score means you’ve done something wrong. There’s often a lot of shame involved with having a bad credit score. People feel that if they have bad credit, they must have done something to deserve it – and they think that of other people, too. But this is not always the case. Sure, maxing out credit cards, not making payments on time or filing for bankruptcy can lead to a bad credit score. But often, a medical billing oversight or another type of mistake on a credit report results in a poor credit score. In many cases, a bad credit score has nothing to do with how financially responsible someone is.
- If you never use a credit card, you’ll never have bad credit. Then there are people who think that by avoiding using credit at all, their credit score will remain pristine and perfect. Not so. Having no credit history can be just as bad, or even worse, than having negative marks on your credit report.
- You can’t get a credit card if you have bad credit. There are certain types of credit cards you will not be able to be approved for if you have bad credit. These include elite travel rewards cards, zero-interest no-fee balance transfer cards, and the most lucrative cash back credit cards on the market. However, there are a number of credit cards made especially for folks who are establishing or repairing their credit. No matter what your score is, there is a card for you.
- It takes a long time to repair a bad credit score. Bankruptcies can linger on a credit report for seven to ten years, it’s true. But that doesn’t mean it will take that long to rehabilitate your credit score. Once you pay off debts and get into good standing with your credit issuers, you’ll be surprised how quickly your score begins to rise.
- Making more money will improve a bad credit score. Contrary to popular belief, your income has no effect on your credit score. A higher income may make it easier to pay off your balance in full, which will positively impact your credit score, but this is not always the case. No matter how little – or how much – you make, a good credit score is within your reach.
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