Five credit score myths busted

Credit Score Bootcamp · 15 Jul 2019

If you're trying to improve your credit score, you could be doing it all wrong.

If you're trying to improve your credit score, you could be doing it all wrong. Here are five common misconceptions about credit scores and how you can avoid making avoidable mistakes

Myth 1. There’s no point in knowing your credit score unless you’re trying to borrow money

It’s true we do look at your credit score and credit file if you apply for a loan, and a good score can help get a good rate.

But we’re not the only ones! Utility companies, phone companies, even landlords and potential employers may request your credit score to check just how likely you are to pay your bills, or just as an indicator of your general character. It may also take time to fix - so waiting to find out what your score is right before applying for much needed credit, might be too late.

Myth 2. Staying out of debt, means you’re credit score will be great

It’s a good theory, but not true. Your credit score is a measure of how you handle credit. To measure how you handle credit you need to have some credit. That’s not to say you need to rush out and get a loan or large credit card balance just to prove yourself. A small credit balance you manage well, and having your name on a utility bill will help creditors get to know your behaviour.

Myth 3. Once your score is good, it will stay good

If only this were true. Unpaid bills can still derail a good score. So can no longer having any credit. Transactions listed in your credit file disappear after five years, so even good behaviour can vanish from your file impacting your score.

Myth 4. A good income = a good credit score

If you’re on a lower income and have proven you can manage debt well, by paying your bills on time you have as good a chance at having a good score as someone on a higher income. The reverse is also true: it’s possible to be on a higher income and not bother about paying your debts on time.

Myth 5. There is one true score to rule them all

Different credit reporters may have different information about you on file, leading to different credit scores. It’s a good idea to check with at least two different credit reporters and ask for your credit file not just your score. And remember companies such as Harmoney may give you another score as part of assessing you for a loan; this is based on the information in your credit file.

Next up in Credit Score Bootcamp:

Ask the credit score expert: Harmoney's Dave Nesbitt

Read more:

Fix your credit file

Your more than just your credit score

Why your credit score matters


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