Credit Myths: Busted, Part Two

Wade through misinformation and become an expert on your credit score.

woman shopping after understanding common credit score myths

There are plenty of myths swirling around when it comes to credit scores. So many, in fact, that we’ve created a two-part series. We’re here to empower you to tell the truth from fiction.

Myth #6: Current and potential employers can look up my credit score.

While employers can do a credit check on your debt and payment history for any red flags of financial distress, they are not able to access your credit score.

Myth #7: Student loans won’t affect my credit score.

Any loan with your name attached to it will impact your credit score. That includes credit cards, student loans and auto loans.

Pay your bills in full each month to maintain your credit score. If you have a hard time remembering to pay everything, set up autopay. And if you can't afford your minimum payments, it’s time to ask for help.

Myth #8: College students are too young to worry about credit scores.

Getting a credit card is an important first step toward building credit, and the minimum application age for some cards is 18. Since the length of your credit history is a factor in your credit score, it’s important to start building credit right now.

Not sure where to start? Research options to pick the right credit card for you. UW Credit Union’s budget-friendly credit cards are worth exploring.

Myth #9: My income affects my credit score.

Your credit score is a number that gauges how much of a risk you are — whether you pay your bills on time and in full and whether or not you’ll take on more debt than you can manage. Income is not a factor in determining credit score.

Myth #10: Ignoring that parking ticket won’t affect my credit score

Actually… you might be surprised at all the sneaky little things with potential to affect your credit score:

  • Unpaid parking tickets
  • Overdue library books
  • Withholding rent payments
  • Unpaid medical bills
  • Phone payment plans

Anytime you owe an entity money and neglect to pay after a reasonable amount of time, that entity can send your account to collections. And that is when your credit score will take a hit.

Two other scenarios you may not realize that will impact your credit score:

  • Asking for a credit limit increase
    • While it could have only a small impact, you may want to talk with a financial specialist first about your goals before you ask for a credit limit increase.
  • Co-signing a loan
    • Anytime you are co-signing a loan, make sure the other party is someone you trust and know is financially responsible. If something happens where they are unable to pay back the loan, you will become responsible for payment.

Forget the myths you’ve heard about credit scores and make smart decisions when it comes to spending money. Use the free credit score resources available to you through UW Credit Union, such as our Credit Consultations and Credit Score Services.

Your credit score will thank you.

UW Credit Union is committed to providing financial education, helping our members and communities build their financial savviness to make empowered decisions. We offer free learning seminars, confidential credit consultations and, through our partnership with Banzai, an impressive catalog of financial education resources.

Here for every you.

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