Your credit score is involved in nearly every major purchase that you make—which creates a track record that people are either very proud of or maybe even a little afraid of. Credit scores are widely misunderstood, and it’s important to know what is fact and what is fiction when it comes to your own personal and/or business financing. But through the buzz of credit score advice, what is really true and what is just gossip? 

Myth #1: “My credit score will improve as soon as I begin paying off my debts.” 

Remember, your credit score is your personal record, which does include everything you have going on currently, but especially what you’ve done in the past. So, if you missed or were late on a payment, that won’t just go away. Starting to pay off loans on time now will help move you to the score that you want, but unfortunately it won’t be an overnight turnover and will take time.

Myth #2: “I need to carry a balance on my credit card in order to build my credit.” 

This is actually incorrect. It’s important for you to continue using your credit card to build credit, but as long as you’re paying it right back off, you don’t need to carry a balance. Furthermore, maintaining a pre-existing balance on your credit card can hurt your score. 

Myth #3: “My husband/wife has a really great credit score so it balances mine out.”

Again, wrong! Even though you are married, your credit scores stay separate. If you have joint accounts then they will appear separately on both reports. Your credit score does not affect your spouse’s or vice versa.

Myth #4: “My friend asked me to co-sign their loan. It doesn’t affect my credit so why not do it?”

Because you’re putting your credit score at risk, that’s why! Though your score isn’t taking a direct hit immediately, you are giving someone else the power to affect it in the future. Ask yourself—how much do you trust your friend? What happens if your friend can’t make the loan payments?

At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: What Are the Advantages of Fixed-Rate Mortgages?

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