With all of the talk in the media about the current credit situation, and with all of the commercials on television telling you how to get your credit score, you’d think we would have a good handle on what goes into a credit score, and how credit scores are doing these days. Unfortunately, there are more and more credit score myths that abound. If you want to get ahead, improve your credit and get access to the kinds of loans that you need and want, you’re going to need to work your way through the forest of misinformation and bust some of these credit score myths:
- The recession has screwed up everyone’s credit. While average credit scores have dropped, many folks have managed to maintain their good credit scores or even seem them rise. The key components to your credit score – paying your bills on time, maintaining low average balances and not applying for credit too often – all still work during a recession.
- Credit scores are the only factor in determining whether you get credit. Sure, your credit score is one important piece of information in that process. Indeed, it is usually the most important piece. However, other information such as your income and length of time on the job, as well as previous experience with the particular lender, might help you out as well.
- You can get your credit score for free. Regardless of what those annoying commercials said, you can’t get your credit score without committing to at least try a particular program from the credit reporting agency. Usually, this is a credit monitoring service that you must sign up for, after which you get your credit score. To get your score, you have to pay for it. The good news is that you can get your credit report for free under federal law at the Annual Credit Report website. While there is talk of changing things so that you’ll get your credit score free once a year, that hasn’t happened yet.
By being an informed consumer and handling your credit responsibly, you can increase your credit score, improve your credit report and open up new credit avenues.