Credit reports: Anyone who has ever had a credit card or credit account has some type of a credit report. Unfortunately, most people don’t really understand the function of a credit report outside of helping lenders determine whether to extend you additional credit. We’ll try to debunk some of the common credit myths you may have heard.
All credit bureau reports will be the same
There are three credit reporting agencies. One of the most important things for you to remember is that not every creditor reports to all three agencies. Lending institutions are not required to report your activity at all; it’s completely voluntary. In some cases, you’ll find information on one report that is not contained on another report.
There’s only one credit score lenders see
This is false. In fact, there are numerous scores and some of them are never seen by consumers. While you may pay to see your overall “FICO” score, the chances are very high that a lender will be using a different score than what you see. In fact, even different lenders will use different FICO scores. If you apply for a car loan, you’ll be subject to one type of FICO score and if you’re applying for a mortgage, chances are the lender will look at a different FICO score.
Bad credit only impacts my ability to get credit
This is a dangerous myth that most people are unaware of. In some cases, your credit report can cause you to miss out on employment opportunities and even your ability to secure an apartment. Bad credit can have an impact on how employers view your reliability and how landlords feel about your ability and willingness to pay rent.
My personal bank balance impacts my credit score
This falsehood is worrisome because people often believe by maintaining a good bank balance they’ll improve their credit. While a history of bouncing checks can negatively impact your credit, a good banking history will not help improve your credit.
Closing credit accounts helps my credit score
Another common myth is that closing your credit card accounts can help boost your credit report. This comes from the belief that because you are using “less” credit, you’ll boost your score. However, keep in mind that “credit utilization,” which affects your credit score, is based on the overall credit you are offered and how much of that credit you’re using. When you close an account, you’velowered the “available” credit balance which could look like you’re really using more credit than you should be. This is how credit utilization is calculated.
When I check my own credit it hurts my score
This is one of the biggest myths many people believe. The fact is every consumer has the right to obtain a copy of their credit report from each of the three major credit bureaus annually at no charge. Additionally, if you are denied credit you have a right to request a copy of the credit report used to reject your application. Finally, if you dispute an item on your credit report successfully, you have the right to get an updated copy of your credit report. None of these actions has any impact on your overall credit score.
I cannot borrow any money if I have bad credit
Oftentimes obtaining a loan can seem impossible when you have bad credit, however having Bad Credit does not mean you cannot borrow money. There are many lenders who are willing to loan money to those consumers who have bad credit. The loan may come with higher APRs and shorter terms, however when you pay these loans back without missing a payment you are on your way to rebuilding yoru credit. , Secured loans, such as car title loans, may be the possible answer for those who have past or current credit problems.
If you are in need of a loan and your credit is less than perfect, we may be able to help if you own a car. Consider contacting us today to learn more about our competitive rates on car title loans. You can apply online by using our easy online application or you can apply by phone by calling us toll-free at: (800) 227-8485.
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