If I have a job and get a pay raise, my credit score will go up.
My credit score will drop if I check my credit report.
If I pay off a negative record like a collections account, my credit score will automatically increase.
Credit score myths – there are plenty out there, and you’re not alone when it comes to believing them. For example, nearly half of Americans incorrectly believe that a pay raise means an increase to their credit score.
When it comes to your credit score, it’s important to know fact from fiction. Why? Because your credit score follows you throughout your life. So, whether you’re trying to build or boost your credit score, let’s debunk 3 common credit score myths:
Your credit score will go up if you have a job and get a pay raise.
Having a job and the amount of money you make have no impact on your credit score. Your credit score is determined by payment history, public records like bankruptcies and judgments, credit history length, new accounts, credit inquiries, and number of accounts in use.
Checking my credit report will bring down my credit score.
If someone like a lender or creditor checks your credit, that is considered a “hard inquiry” and can slightly lower your credit score. If you check your own credit score, this is considered a “soft inquiry” and does not impact your score. In fact, you should check your credit score regularly, and every 12 months, you are entitled to a free copy of your credit report from each of the nationwide credit reporting agencies.
Paying off a negative record will result in an automatic credit score increase.
A negative record like a collections account or late payment can stay on your credit report for up to 7 years from when the delinquency occurred, and a bankruptcy can stay on your credit report for up to 10 years. That said, you should continue to make every effort to pay off your negative records – just remember that it will take time for a negative record to be removed from your credit report.
Take the time and do your homework. Know what’s a credit score myth and what’s a fact, so that you can take the right steps to build or boost your credit score.