A Credit card score is the most important proof of your creditworthiness, if you apply for a loan, a new credit card, a home loan, etc the bank will check your credit score to know if you are a safe investment or not. As a result, maintaining a good credit score is critical. Credit cards not only provide their clients with a credit line but also a good amount of offers and incentives. Still, there are so many myths roaming around, we are here to burst them.
Following are the Myths about Credit Scores:
Myth 1: Examining the credit score would cause it to fall:
This is perhaps the biggest widespread misconception about credit scores. Anytime users check their credit score, it is considered a soft inquiry, which has zero effect on their credit score. As a matter of fact, keeping an eye on your reports on a regular basis will do you better than harm. You learn what works and what causes your score to drop.
Myth 2: Shutting down outdated accounts can assist you in improving your credit score:
It's never a good idea to close old accounts. If an account is fully paid but is no longer in use, you should keep it open to extend your credit history and enhance your trustworthiness. It is advisable to keep an old card alive and carry out a little purchase through it even when you aren't using it. Removing the old card account won't improve your rating in any way.
Myth 3: Debit cards can assist you in establishing your credit score:
Debit cards are connected to your savings accounts which means that there is nothing on ‘credit’ therefore the misconception that debit cards help you in establishing a credit score is nothing but untrue. Because you are not taking a loan from any issuer or bank, making transactions from your credit card is not, in any way, considered in determining, or affects your credit score.
Myth 4: Your earnings have an influence on your credit score:
Again, not at all true. Your credit score is unaffected by your income in any manner. How well you handle your credit and your ability to make timely payments are only a couple of the factors taken into account while generating your credit report.
Myth 5: A poor credit rating cannot ever be repaired:
Most of the time users notice their poor credit scores, and they become frustrated while believing it will be that way forever. Matter of fact, just because your credit rating is low now does not imply it cannot ever increase. Through the practice of sound money planning, like repaying all loans and payments on time, and staying under your CUR, low credit ratings can eventually be improved to decent ones.
BOTTOM LINE:
A credit score is a very important thing, so it is understandable to be careful. Being cautious is a good thing but believing blindly everything that a person tells you will not do you any good. The best course of action would be to research the information and then decide on its credibility.
Additional Reading: Citi Bank Rewards Vs Axis Bank Magnus Credit Card
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