Credit Score Myths

Credit scores are important; they are a significant factor in determining loans, housing, and even employment.  Most consumers have many questions about their credit score.  For instance: what is a credit score?  Who determines your credit score?  How do you improve your score? 

Myth: Credit repair companies work.

Reality: Credit repair companies that advertise a quick resolution for a fee could be scamming you.  Credit repair takes time, and there is no way to hasten the process.  To improve your credit, you must keep your credit balance low, regularly check your credit reports, and make all your payments on time.

Myth: TransUnion, Experian, and Equifax (known as the Big 3) are the only credit reporting agencies.

Reality: While the Big 3 are the nationwide credit bureaus, there are a lot of credit reporting agencies (CRAs).  They can report on different information, like employment history, and because these companies are constantly changing, merging, or closing, it’s difficult to keep track of legitimate CRAs.  Check out our up-to-date list of CRAs here.

Myth: You only have one credit score.

Reality: Each credit reporting agency has a different way of calculating your score.  It’s normal to notice variations between scores from different credit reporting agencies.  

Myth: Checking your credit will lower your score.

Reality: Checking your own credit will not affect your score, no matter which website you use.  You are entitled to a free copy of your report every 12 months under the Fair Credit Reporting Act.  You can obtain them for free by going to annualcreditreport.com.  Hard inquiries, or credit checks performed by loan creditors or credit card companies, do factor into your credit score.  

Myth: You must have a high salary to have a good credit score.

Reality: Credit reporting agencies do not have access to your income, so it won’t influence your score.  However, whether you pay your bills on time does have a direct impact on your score.

Myth: Employers can pull your credit score.

Reality: No, they can’t!  An employer does not have access to your credit score, but they can pull a credit report.  This credit report is usually part of an employment screening or background check and includes different information than that of a credit report that you may pull yourself.

Myth: Credit reports can’t contain errors.

Reality: At least one in five Americans has an error on their credit report!  You can, however, get them corrected, but it may be difficult to fix them on your own.  The Consumer Law Firm of Francis Mailman Soumilas, P.C. has helped thousands of people resolve problems with their credit report.  Call us at 1-877-735-8600 or fill out our form for a free case review.

Knowledge is power, so make sure that you regularly check and understand your credit score!