Main Myths Concerning Credit Score

Credit score is a basis of financial stability, especially if it's good enough. However, there are several myths referring credit score even well-informed consumers believe in:

1. Only serious financial mistakes can affect personal credit score negatively. Well, of course, foreclosure and bankruptcy will ruin your credit score, but these are not the only factors which can cause a harmful effect. According to the credit scoring formula, even one late payment or a number of store credit cards for promotional discount can make you risky borrower.

2. Good credit score can be reached by paying bills and payday advance loans on time and carrying credit card balance. In fact, personal credit score (at least 30%) is based on utilization ratio. Though, don't forget about providing payments on time as it's also a significant factor for your credit score.

3. Bad credit can be improved fast. There are particular credit repair agencies which offer the service of quick credit score improvement. Well, they are actually able to do this, but only for a couple of weeks by means of blanketing your creditors with frivolous requests to review your outstanding debt. Still, there are low credit payday loans for those in urgent money need.

4. Tree-digit score is the only part of personal credit history that matters. In fact, credit report is as important as the score number, thus, experts recommend to check it at least once a year by means of providing request to the credit bureaus. Besides, it's free.

5. Jointly-held credit accounts are dissolved by divorce. Americans should be aware that their credit score can be hurt by the former spouse, in case of divorce. If you are a holder of joint account and your former spouse fails to keep current on payments, be ready that it will impact your credit score, as both of you are responsible for the balance equally.

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