4 Myths About Your Credit Score and Credit Report
Having good or bad credit affects how you can spend money and what you can buy. Building your credit up opens a lot of doors like having the ability to buy a house or car or open a credit card. However, there’s a lot of confusion about which things truly affect your credit positively and negatively. Below, there are four credit myths that are commonly perceived to be true.
Having No Credit is the Same as Having Good Credit
Having no credit is better than having bad credit, but doesn’t guarantee you the same perks as having a good credit score. Having a credit report means you have a history that banks and credit card companies can look at to decide whether or not you’ll use their services wisely. Sometimes, if you don’t have any credit, a bank or credit card company will decide they can’t risk that you’ll use a loan or credit card unwisely. It’s the same story with buying a home or car, putting up a security deposit for a rental, or paying more for car insurance – you’ll have a harder time or be asked to provide more money up front in the place of having good credit history.
If you don’t have any credit, you have the opportunity to build a high credit score. You can do this by paying your bills on time, taking out a credit card and paying it back, or taking out a loan and sticking with your payment plan. If you manage your money wisely, you’ll have no problem building a good credit score.
Checking My Credit Score Will Hurt My Credit
Checking your own credit score and keeping track of its fluctuations is a very financially responsible habit. When you check your own credit score, it will not hurt your credit because it’s considered a soft inquiry. Only hard inquiries affect your credit score. A hard inquiry occurs when a financial institution checks your credit report when making a lending decision. You’ll be asked to authorize any hard inquiries to your account.
My Bad Credit Score Will Follow Me Forever
Having a bad credit score can feel like you’re at the bottom of a deep hole that you can’t climb out of. However, it doesn’t always have to be that way. Even if you’ve made poor financial decisions in the past and landed with a bad credit score, you can always improve it. Start by making all of your bill, credit card, mortgage, or rental payments on time. You can also get a credit card as long as you’ll use it responsibly. Over time, your credit score will rise and your bad credit will be just a distant memory.
Paying Off Outstanding Debt Will Erase it from My Credit Report
While paying off outstanding debts is a great step in the direction of building a positive credit score, it won’t make charge-offs disappear from your credit report. Your credit report is your credit history, so it will show your debt as charge off paid for seven years from the date of delinquency. Over time, paid debts will affect your score less and less, but any kind of overdue debt will always affect your credit.
Do you have bad credit but still need a loan? Give CreditBox a try. We consider a wide variety of factors when an individual applies for an installment loan, so bad credit isn’t always a deal-breaker. Apply online today to see if you qualify for a loan.