People in need of improving their credit score comprehend a lot of things from unknown sources. While some of that information might be genuine and authentic, most of it is not. But the thing that is very real is your credit score and its effects on your daily transactions.
To make sure that you know exactly what your credit score means, we have compiled a list of what many people have conceptualized incorrectly. After all, if you know exactly what’s wrong, you will eventually reach the right spot.
Some Popular Misconceptions
- There’s only one credit score for an individual
It’s a complete misconception because many authorities calculate your credit score and use different formulas. One cannot reach the same score due to qualitative and quantitative differences in calculation. Many parties, including the highest authority of the country, use the credit score to lend you money through commercial Banks.
Moreover, one person can have a business credit score as well as the individual credit score. Of course, this is in a case where the person runs his own business.
Bad credit score is irreversible
All those who want to know about the process of rebuilding credit after bankruptcy overthink and come to the conclusion that bad credit scores as irreparable and irreversible. However, the opposite of it is true. You can build credit by hiring a credit repair agency and simultaneously improving your habits of repayment.
Some tips and tricks up your sleeve can help you better scorer faster. So, this misconception is totally wrong as many people have got amazing results through credit repair practices.
- The credit score is unfair most of the times
When we consider an overall credit score of a person, we never take into account his demographic variables. For example, for a person having a credit card, only his spending and repayment habits will be considered while compiling a report. The gender, occupation, race, geographic location, marital status, etc. are kept totally out.
So, mostly it’s the quantitative data that is recorded. Thus, the chances of the credit score being unfair are very low.
- The credit report can hinder privacy
The credit report is only available to the lenders. Moreover, it is only that information that goes out to the commercial banks. No insider information is exposed to the market. It’s only a summation of your habits of repayment and the loan amount you have borrowed from the bank.
If you hire a credit repair agency, both of you sign an agreement that doesn’t let anyone leak out any information about one another.
- Borrowing more leads to bad credit
That’s not at all the truth. However, if the subsequent actions of repayment are not appropriately met, then the higher your debt is, the more it will reflect on your credit score. So, in short, it totally depends upon your paying habits and how the lender records that information.
Checking the credit report affects the credit score
While it is partially true, it never harms to check your credit report after certain intervals to be aware. However, if you ask for the report very frequently without any understandable matter, it will definitely affect the score based on suspicion.
There is a procedure to ask for the report from the concerned authorities. If you hire an agency to file a request for you, it knows how to file an application for the same professionally. If all the steps are followed, it doesn’t harm the credit score.
With all these points, we hope that your myths about how to rebuild credit after bankruptcy are classified. If you still have any doubt, you can ask your credit repair agency. Remember, trust only those services that have good reviews and who follow the drill consistently.