Your credit score is an important number that displays how well you manage credit. It ranges between 300-900 and anything above 750 is considered a good credit score.
Myth About Credit Scores
Today, we’ll address a few common misconceptions about credit scores –
Myth #1: Checking your credit score regularly will lower it
When you pull your credit score, it is counted as a soft inquiry. When a financial institution pulls your credit score, it is counted as a hard inquiry. Soft inquiries do not affect your credit scores while hard inquiries do. So no, being updated about your credit score does not lower it.
Myth #2: Your income affects your credit score
Credit score is based on your credit behavior and not your income. It is affected based on how timely you repay your credit card bills and loan installments and how well you utilize credit. Not on the basis of how much you earn.
Myth #3: Closing old accounts will improve your credit score
A long credit history helps the lender in identifying your credit behavior. Closing your old credit accounts only shortens your credit history. This results in a negative effect on your credit score rather than a positive one.
If you haven’t built your credit score yet, this might be a good time to begin. Explore loans to avail loans with zero documentation and no early closure fees.