Vantage Point

Boost Your Credit Score by Debunking These Myths

It’s a Money Thing

Credit scores are an area of personal finance that seem a lot more mysterious than they actually are. Many people believe that improving them is a matter of trial and error; as a result, there’s a lot of bad advice and myths out there. To help, we’re debunking three myths about your credit score:

MYTH #1: You have no control over your credit score

It’s OK to find credit scores confusing, but if you have an accompanying “there’s nothing I can do about it” mentality, ditch it right now! Your credit score is a reflection of your borrowing and repayment behaviors, and that means you have a lot more control over it than you think.

MYTH #2: There’s a “quick fix” for your credit score

Although junk mail and late-night commercials try to convince you otherwise, boosting your credit score doesn’t happen overnight. The good news is that the things you can do to positively influence your score are simple and don’t require a lot of time (or even that much effort!)—but the trade-off is that you’ll have to be patient while waiting for your new good credit habits to take effect. Your credit score is more of a track record than a snapshot, so consistency is key.

MYTH #3: Checking my credit report will negatively affect my score

This myth comes from confusing two different types of credit score inquiries: hard inquiries and soft inquiries. Hard inquiries are made by lenders or credit card companies when you apply for a new line-of-credit (for example: a loan, a new credit card, or a mortgage). Soft inquiries are made by you or by others for background check purposes, such as those done by potential employers or landlords.

Because hard inquiries suggest you might be taking on more credit soon, they usually lower your score by a few points. Soft inquiries, on the other hand, do not affect your credit score in any way. This means you have nothing to lose by accessing your own score—in fact, doing so will help you understand what your current credit activity looks like and how you could improve it.

Note: there are some situations (like renting a car or a landlord running a credit check) where either a hard inquiry or a soft inquiry can be made. In these cases, it’s a good idea to find out beforehand what kind of inquiry will be made so that you know what to expect.

Remember: Vantage is here to help!

  • In response to the COVID-19 pandemic, the three credit bureaus are offering free weekly credit reports through April 2021. Visit annualcreditreport.com to get your credit report.
  • Finally, you can always schedule an appointment with a Vantage Financial Coach to receive the personal guidance you need to get a handle on your credit score and keep your finances on track.