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There are many myths concerning credits scores that people accept as gospel truth.  Here are 3 thoughts to ponder:

Myth #1: Checking My Own Credit Report Will Lower My Score.

Personal inquiries are known as “soft inquiries” or “below the line inquiries,” and are not displayed to lenders. Therefore, they are not part of your credit score calculation. Checking your own credit report or score does NOT negatively impact your score, but it can negatively impact your bank account since you are only entitled to 1 free credit report per year.

Myth #2: Applying For New Credit Will Lower My Score.

This is mostly a myth because it is not always true, but rather sometimes true. It depends on the type of credit you’re applying for. For example, if you apply for several credit cards within a short period of time, this would cause the number of inquiries to go up. A large enough increase in inquiries could drop your score. However, if you’re applying for a mortgage or auto loan then multiple inquiries from those types of lenders are generally treated as a “single inquiry”, having little impact on your credit score. This is because mortgages and auto loans are secured debt (good debt) because there is a tangible asset behind the loan.

Myth #3: My Score is the Only Thing That Matters to a Lender.

Credit grantors can consider factors such as your assets, income, employment history, length at your current residence as well as your credit score when determining whether to grant credit. The criteria as well as the formula are different from creditor to creditor.