Four Credit Myths Debunked

It's no secret that there are plenty of myths when it comes to your credit scores. Just because you've heard something all of your life, or heard it from someone you trust, doesn't necessarily make it true. 

Here are four common credit myths debunked:

1. Myth: One score is all I need to check. Maybe you checked your score with one of the bureaus, and everything looked good, so you moved on with your busy life. Think again. Creditors won't necessarily just look at one score; they could look at all three primary credit reporting bureau scores (TransUnion, Experian and Equifax) to get a complete picture of your payment habits. These three scores are rarely identical. You may have to look at all 3 main credit bureaus to make sure they have the right information and credit history.

2. Myth: It is impossible to take out a loan if I don’t have any credit. When reviewing your credit application, lenders look at your identification, account history, public records and inquiries. If you don't have a credit history, you may have to have another person with an established credit history co-sign on your loan –but it isn't impossible.

3. Myth: High income and credit scores make for the best credit card deals. If you have a high income and a high credit score, you may be receiving great credit card offers with fantastic sounding rewards in the mail.  It may not be because of your credit standing however. Paying attention to the interest rates and annual fees on these offers can help you make sure you really are getting the best deal. Oftentimes, these better rewards come at a higher cost.

4. Myth: I'm only responsible for half of joint debt. Sharing a loan with another person doesn't necessarily mean you are simply responsible for half of it. Both you and the co-borrower are fully responsible for the debt. This means even if you are just co-signing so that someone else can get a credit card or a loan, the amount of credit they are taking out is added to your debt-to-income ratio. If they make late payments or don't pay at all, this credit history can also be added to your credit report.

As with anything, it's important to be educated on the myths and realities of credit.