5 Credit Score Myths Busted Wide Open

Money & Finances Personal Finance

When it comes to credit scores, there are some things that can’t be denied. For instance, having a great credit rating can save us some serious money – we’re talking thousands – on the cost of credit. Having a bad credit rating, however, can completely stop us from borrowing money at all.

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But while a lot of credit rumors are facts, there are an increasing amount of myths that are circulating the web and gaining traction. As such, we have put our myth-busting cap on to help cast some light on the most common myths of all.

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Living With A Bad Credit Person

We heard someone on the bus the other day say they had to move out of their current flat share because their roomy had a poor credit rating and that it was bringing her own rating down. This isn’t true. Your rating won’t be affected simply because you live with someone who has bad credit. The only way you’ll be affected is if you share a bank account with them or something, then you could be affected.

Using Cash Helps Credit Rating

Yeah, we’re afraid to tell you that using cash won’t help your credit rating simply because your lender or bank won’t be able to see whether you are fantastic or dreadful at repaying debts. Spending responsibly on a credit card is the smartest way to improve your score. What lenders do is they look at your borrowing history and then make an informed decision about how good you are at managing your money. It’s how they weigh up the risks. So if there isn’t a long history to look at, well, they aren’t going to take the risk.

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You Can’t Get The Basics

By the basics, what we mean is a phone, a car or a home but, while these things all get affected, it is wrong to say you can’t get them. It will be trickier, and the worse off your credit score is the harder it will be, but it won’t be impossible. Let’s start with phones, there are ways to get pay monthly phones with no credit check needed. As for cars, your insurance premiums will be higher, and maybe you will have to put a more down up front, but you can still get a car. And lastly, a home. Yes, a mortgage won’t be easy, but renting is possible because not all landlords require a credit check.

More Money In Your Bank Is Better

Yeah, having money in your bank accounts is better than having no money in your accounts, but your checking account alone won’t affect your credit score; not in any way whatsoever. The only thing that matter is whether you keep up with your repayment plans. That is what is important. You could have a million bucks in your bank, but if you aren’t keeping up with your mortgage repayments then your credit score is going to start looking bad.

The Credit Blacklist

We have to admit, we didn’t know this existed until a friend of ours said they were probably on the credit blacklist, so we did some investigation about what this list was. Well, it turns out it is a myth. There is no such thing as a credit blacklist. Lenders get their information from a range of data and base their decision based solely on that, so ignore anyone who mentions this blacklist.