Raising your credit score can be quite simple once you know how, but first you have to disentangle the myths from the facts.
The team at www.onlinemoneyadvisor.co.uk have cleared up five credit rating myths to help clear up any confusion.
Myth 1: You need a credit card to boost your score
Although a credit card can help, it is not essential for a good credit score. If you don’t think you can use a credit card responsibly, don’t try to get one, as it could end up hurting your credit score. There are many ways to increase your score without a credit card.
Myth 2: Credit scores are the only things that matter when you take out a loan or mortgage
Yes, credit scores take into account whether or not you will be accepted for a loan or mortgage, but they are not the ultimate solution.
The lender just wants to know that you are financially stable enough to meet the payments, so they don’t take big risks by lending you money. There are many things that are taken into consideration as well as your credit score.
Myth 3: Avoid unnecessary credit checks
Checking your credit score won’t damage it, but some types of checks can.
There are two types of surveys: hard and soft. A soft survey is to check your score yourself, which will not affect your score.
Hard asks, on the other hand, occur when you apply for additional credit and a lender reviews your file, which can lower your score.
Myth 4: A low credit score can last forever and there is nothing you can do about it
That couldn’t be further from the truth. Although a low credit score isn’t good, it doesn’t last forever. There are several different things you can do to boost your credit score, and over time it will improve as long as your financial habits improve as well.
Myth 5: You need a perfect credit score
The idea of having a perfect credit score may seem like the epitome of being a successful adult, you really don’t need it. The most important thing is that your credit score is healthy, so as long as it is classified as a good score, you are safe.