Fact or fiction: Most Common Credit Report Myths
Failing to understand credit scores and how they work can put a dent in your financial life especially if you don’t know fact from fiction when it comes to your credit rating.
Companies that create scores are increasingly open about how they work, still myths and misunderstandings about credit scoring are still flying. Here are some of the most common myths that could lead to credit report errors:
1. You’re not responsible if you co-sign for the account
The myth that relinquishes your responsibility if you’re a co-signer on account is not true. If you open an account jointly or co-sign for a loan, you will be held legally responsible for the account.
Activity on this joint account will show up on the credit reports of both account holders. if you co-sign for a friend or relatives loan and that person skips payment, your credit profile will be affected.
2. Your credit score drops if you check it on your own
This misconception fools a lot of people. A “hard credit pull” the type of examination that’s made for those
applying for a new credit card, or a mortgage stays on a credit report for at least six months, and it will lower a credit score. But checking your own credit report, which is considered a “soft credit pull” won’t hurt your credit score but is a great tool especially when making big purchases.
3. Race, gender, marital status, religion or income can affect your credit score
Not true. Federal law prohibits credit scoring from taking any of those factors into account. Records maintained by the reporting agencies include no personal demographic information apart from birthdates.
Your best defense is to be informed and knowledgeable when it comes to checking your credit score. There’s a ton of information out there and some of it may be misleading. Don’t be fooled by these popular myths.