A picture might be worth a thousand words, but a set of numbers can tell an even bigger story. Whether it is a person's age, the amount of miles on a car or the number of dollars in a bank account, a few digits can be used to form an opinion or belief.
One total - and a few digits - that many lenders read into is a person's credit score. For many people, it can seem as if their score was pulled blindly from a hat. So let's take a look and debunk a few myths.
Debunking credit myths
Certain people think checking your credit report will hurt their score, but that's not necessarily the case. Checking your score generally doesn't hurt your score, but errors on your credit reports do. UMB reported that 70 percent of credit reports have errors on them, so even if you haven't done anything wrong, your credit may take a hit due to a faulty report.
Another portion of people are concerned that maintaining a balance on their credit cards will negatively impact their credit score. Keeping a balance will only increase your interest payment, as using a credit car can increase your credit score — especially if you are building or revamping your credit.
Many cardholders feel filing for bankruptcy will destroy their credit forever. That's not true either. It can take up to 10 years for a bankruptcy claim to be removed from a person's credit history, but many consumers have found that their credit scores are virtually recovered within a few years.
Attending credit counseling is not a wrecking ball on your credit. UMB reported attending a credit counselor's debt management program is not considered negative in scoring models.
Copyright 2016 UMB Financial Corporation
“UMB” – Reg. U.S. Pat.& Tm. Off.
When you click links marked with the “‡” symbol, you will leave UMB’s Web site and go to Web sites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other Web sites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.