10 Myths About Your Credit Report and Credit Score

by Ron Haynes

When it concerns your credit report and credit score, there are more myths floating around out there than you can believe. The biggest problem with a myth, is that when someone unwittingly believes one, convincing them otherwise can sometimes be difficult (though not impossible). I’ve often wondered why it seems easier to believe a myth than the truth, but that’s a topic for another day!

Here are 10 of the most common credit score and credit report myths I run into:

Myth: Checking my own credit report can hurt my credit score.

Truth: Personal inquiries appear as “soft inquiries” on your credit file and these soft inquiries are not displayed to others and are not used when calculating your credit score. So, monitoring your credit report and score to make sure your credit information is accurate will not impact your credit score. Recommendation? Get your credit score from myFICO.com and see what the lenders REALLY use to determine your credit risk.

Myth: I don’t use credit so I don’t need to worry about my credit score.

Truth: Your credit history can impact decisions made about you when you buy a car or home, apply for insurance, rent an apartment and even apply for a job. Bear in mind that anyone with “permissible purpose” can obtain a copy of your credit report. They can be existing creditors, potential lenders, landlords, insurance companies, or law enforcement agencies. Potential employers can also obtain your report, with your permission. So be sure to check and monitor your credit report frequently so that you can promptly address any possible errors or fraud.

Click here and get your REAL credit score from myFICO.com.

Myth: My credit report reveals my income and what I spend my money on.

Truth: Your income and bank statements are NOT included on your credit report. The bulk of your credit report consists of information about your credit accounts – date opened, credit limit or amount of the loan, payment terms, the balance and your payment history. Also, your credit report contains a list of “inquiries” or requests to see your credit report and any bankruptcies, liens or judgments and debts reported by collection agencies.

Myth: When you get married your credit report is merged with your spouse’s to create a combined credit report.

Truth: I actually covered merged credit and marriage a while back. Since credit reporting agencies only maintain credit files on individuals, your credit file remains as your individual credit file when you get married … it isn’t merged with your spouse’s credit file. The only information that would appear on both you and your spouse’s reports would be joint accounts or those for which one spouse is an authorized user, or other items in both of your names, such civil judgments, liens and bankruptcies.

Myth: How I pay my bills is the only factor in my credit score.

Truth: Your payment history to existing creditors IS the single biggest factor determining your credit score … but it isn’t the only one. In most credit score models, payment history comprises 35% of your score. Other determining factors are: amounts owed (30%), length of credit history (15%), types of credit used (10%) and new credit inquiries or requests for your credit file (10%). So, it is a good idea to always at least make the minimum payment on time each month – and pay more when you can to decrease the amounts you owe.

Myth: Credit repair companies can clean up my credit report instantly.

Truth: Credit repair organizations cannot “clean up” your credit by removing missed payments, bankruptcies, liens and judgments from your credit history. There are typically no quick fixes because accurate and timely credit information generally can not be removed from your credit report. If you need help, consider contacting a reputable credit repair company or counseling agency to make a plan for paying off credit bills. And, beware of agencies that offer “quick fix” ways to get out of debt as they are often unethical and sometimes illegal.

Myth: No one can dispute what’s on their credit report.

Truth: You have the right to dispute information that you feel is being reported incorrectly on your Equifax credit file. The quickest and easiest way to initiate a dispute is online at Equifax.com – but you may also do so over the phone or through the US Mail. You should have a current copy of your Equifax Credit Report™ and your ten-digit confirmation number in order to complete this process.

Myth: Transunion, Equifax, and Experian determine if I get a loan.

Truth: The three credit bureaus DO NOT determine whether you qualify for a loan and at what rate. When you apply for a new loan or credit card, a lender may use the information in your credit reports to determine whether to lend you money and at what rate – based on their own risk criteria. The credit system allows consumers to acquire needed credit quickly and easily while allowing lenders to offer terms that correspond with the credit risk they’re willing to accept.

Myth: Closing a credit card account will improve my credit score.

Truth: Closing credit card accounts will not always have a positive impact on your credit score. As a matter of fact, closing credit card accounts may not always be a good idea for two reasons: (1) It can hurt your credit to debt ratio (2) It could also hurt of the length of your credit history if you close an older account. Also, don’t open new credit cards that you don’t need just to increase your available credit. This approach could backfire and actually have a negative impact on your credit score.

Myth: Consumers only have one credit score.

Truth: There are many different score models that can be used to calculate your credit score. But the credit score found at myFICO.com is used most often by lenders when determining whether or not to lend you money and at what rate. Further, lenders also may use a specialized scoring model to meet their specific needs. For example, an auto dealer might use an “auto adjusted” score model to add more weight to your auto loan payment history and a mortgage company will use a specialty mortgage scoring model that gives additional weight to the way you pay for housing.

By all means, don’t get caught up in all the hype about a “triple score.” There is no such thing and event the free scores usually require a credit card and a signup to access. They call it “FREE” because you can cancel your service within the first 30 days and believe me … canceling it is a PAIN. All a “triple score” is is all three credit reports scored in a company’s scoring model and chances are, your bank or lender doesn’t use that scoring model. They probably DO, however, use the scoring model from myFICO.com. That’s why I use it and recommend it.

About the author

Ron Haynes has written 988 articles on The Wisdom Journal.


The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.