Read these myths to make sure you are not fooled into any of these common credit score myths.
Myth: I only have one credit score, right?
In truth, you have three credit scores, one from each of the three major credit bureaus. "These scores can vary by as much as 50 points or more," said Ryan Sjoblad, a spokesman for Fair Isaac. This is why it's a good idea to check all three.
Myth: Checking my own credit will lower my credit score.
You can check your own score as many times as you want without impacting your score, but make sure you do so via the bureaus or a legitimate score seller like MyFICO.com rather than, say, at a car dealership.
Myth: My age, income and sex are factored into the credit score.
None of this information has any bearing on your score. Your employment is something that is listed on the credit bureau report, he added, but doesn't affect the score itself.
Myth: If I can raise my salary my score will go up.
Paying off your debts will improve your score. Earning more money, winning the lottery or inheriting a fortune, however, will not because your net worth and income are not factored into your score.
Myth: To remove unfavorable information all I have to do is dispute it.
If there is information in your report that is legitimately inaccurate, you should by all means dispute it. Credit agencies are obligated to investigate credit inaccuracies within 30 days or remove disputed information. But don't fall for so-called credit repair companies promising to remove unfavorable information from your credit reports to "instantly" improve your score. These days credit agencies not only investigate disputes quickly, they know a sham when they see it.
Myth: If I shop around for a loan it will hurt my score.
When you apply for a loan or get pre-approved the creditor checks your credit report, which shows up as an inquiry to your credit. While it's true that having too many inquiries to your credit will lower your score, you absolutely can shop around for a mortgage, home equity loan or car loan without worrying about damaging your credit, said Sjoblad. "As long as the same kind of inquiries are made within 14 days of each other, they count as one inquiry on your credit score," he said. Take note: This grace period doesn't apply to credit cards.
Myth: Credit card offers are hurting your score.
Credit card solicitations, while annoying, don't affect your score. That's assuming you don't respond to the solicitations and use all of the credit that's available to you. There is no magic number for how many credit cards are too many, said Fair Isaac's Cheri St. John. But, if ratio of credit used to credit available is high, that indicates higher risk. "Clearly consumers want to keep balances below the available credit line," she added.
Myth: If you are married your credit scores are merged.
"People think once you're married your credit information gets mixed," said Sjoblad. But, your good or bad credit is yours and yours only 'til death do you part. When you open accounts jointly, though, that information will be reflected on each of your credit reports, for better or for worse.
Click here for five tips on how to clean up your credit report.
