Credit scores are a fact of life. Lenders use the scores to uncover information to determine how likely a borrower is to pay back a loan in a timely fashion. Since credit scores are so important, they have taken on a kind of mystical aura that has led to many misconceptions. The average American thinks they know all about credit scores and how they work, but in reality most are misinformed.
Below are some common credit score myths, and the truth behind them:
Myth: If you experience credit problems, your credit score will not improve for seven years.
Fact: You can make a significant difference in your credit score by changing your ways and paying bills on time. That’s because lenders place more significance on the most recent entries on your credit report rather than the old ones. Credit Score Myths Abound