5 Common Credit Score Myths

Credit Scores can be confusing and as such there have been many myths surrounding them. These myths can really lead you down the wrong path. Being aware of these myths is important to keep your credit score healthy.

1) Better the Job the better the score

Your job position and income has no effect on your credit score. An individuals credit score is based only on the information found in your credit report. Credit reports include a lot of information about your use of credit, how much debt you have and your management of debt.

2) Paying debts means they instantly come off your report

It is important to remember that even if a person has paid an amount in full after it was listed on the credit report does not overwrite the fact that it was an overdue debt. The status of default or missed payment will only be updated to paid and will not be removed from an individuals credit file, therefore the adverse listing will still remain ultimately affecting the ability to apply for credit.

3) I’ve only missed one payment, so it doesn’t matter

Any missed consumer credit payment that is more than 14 days after it was due can still be marked on your report by your credit provider.

4) The unpaid debt was small, so my credit history shouldn’t be affected

Any missed consumer credit payment is recorded. This means that no matter how small the amount is it will be marked on your report and can have an adverse effect on your credit score.

5) If I pay my utility bills on time, I’ll have good credit

Repayment information for to utilities, phone or internet contracts, road tolls and public transport fines will not show up on a credit report.  That being said it is still very important to pay to avoid having defaults or judgements listed on the credit report.

Disclaimer: The information provided in this article is general in nature only and does not constitute as personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Therefore, you should always take into consideration whether the information is appropriate to your individual circumstances prior to acting upon it.