19 Common Credit Score Myths

You have one credit score. This myth is very common, but very wrong. You actually have three credit scores, one from each of the three main consumer credit reporting agencies -- Experian, Equifax, and TransUnion. Because each agency may be privy to different information about your accounts, your scores could vary significantly. When a creditor pulls your credit, usually only one report and score is pulled… so you want to be sure that your score is the best that it can be at all agencies.

If you can keep getting approved for new credit, there is no reason not to keep applying for it. While it might seem that hoarding credit as a type of emergency fund might be a good strategy for protecting yourself against unforeseen expenses, a general savings fund definitely is the more responsible way to go. If you have too many open accounts and continually are applying for new credit, then your financial situation will appear desperate for those who pull your credit. In addition, every time a potential creditor inquires into your credit to determine whether or not to lend to you, that in and of itself harms your score.

Your credit score will shoot up as you pay off debts. If you have debts that have not been paid consistently, then just paying them off might not help your score significantly. While paying off a debt does look good, it does not eliminate the information on your credit report about your late payments in the past.

Your credit score is affected by your spouse’s credit score. Your credit score and your spouse’s credit score are 100% independent of one another.

Credit counseling will hurt your credit score. Enrolling in credit counseling does not have any affect on your credit score, so if you are having trouble keeping up on your payments then this in a great resource to which to turn.

If there is a mistake on your credit report that is affecting your score, that is just too bad. If your credit report contains an error, then you can, and should, fix it through credit repair.

Each of the consumer credit reporting bureaus calculate your credit score a different way. Your score is calculated the same way at each agency, and differs only because agencies have access to different information. You are not going to have a terrible score at one agency and a wonderful score at another.

There is a specific method to getting a high credit score. Your credit score is calculated taking into account a large amount of information. While certainly making payments on time, not using all of the credit that you have available to you, and limiting hard inquiries into your credit can help to improve your score, it really is impossible to take specific actions to get a particular score. Even experts are unsure about how scores appear to be calculated!

You should not worry about your credit score because there is nothing you can do about it anyway. In contrast to the myth above, it also is a myth that you should not try to take action to improve your score. Out of all of the factors taken into consideration, consistently making on-time payments on your debts, as well as using only a fraction of the credit available to you, generally go the longest way in improving your score. While it is not always possible to alter your score exactly how you would like, disregarding your score completely definitely will alter it in the wrong way.

You cannot monitor your own score because checking it will hurt your credit. Checking your own score does not have any affect on your credit. It is “hard” inquiries into your credit, such as those by prospective creditors, that may count against you in excess.

There are companies that you can pay to remove negative information on your credit report quickly and easily. If there are false negative listings on your credit report, then you or a company working on your behalf can take action to try to correct it, but accurate negative items are there to stay. In any case, no company can guarantee the removal of any items, so stay away from those that promise a quick and easy result.

When shopping around for your best credit option, expect your credit score to be damaged by all of the inquires necessarily made into it. When you shop around for credit, all of the same types of inquiries made within the same two week period count only as one inquiry. Do not let the fear of damaging your credit keep you from shopping around for the best deal, just do so wisely.

A simple way to improve your credit score is to close some of your open accounts. While having too many accounts open can be detrimental to your credit score, so can closing accounts. Remember that part of your score is determined by your use of credit in comparison to your available credit, so closing accounts will increase the percentage of your available credit that you are using. Experts especially warn against closing accounts that you have had open for a long time, as this can be particularly damaging.

The higher your income, the better your credit score will be. Your income has no bearing at all on your credit score, including significant decreases or increases.

Your personal characteristics like age and education level have an affect on your score. Your credit score is determined without regard for your demographics.

Credit scores range from 0 to 1000 (or some similar range). Credit scores range from 300 to 850.

Once your credit score is "good", there is no reason to try to improve it further.  No matter how happy you are with your credit score, any further improvements that can be made can help you to realize significant advantages, like better interest rates. Any “small” increase in your credit score can have quite large real world consequences.

If you are receiving lots of credit offers, then your credit score probably is being damaged. If you receive lots of credit offers, even if they are pre-approved, it does not affect your credit whatsoever unless you apply.