Unfortunately, there is a lot of fake news about credit scores. I’ve seen FICO credit score myths passed off as fact to bully people into bad credit loans and debt negotiation.
There are some FICO credit score myths that get to the very definition of your score and what it means to your finances. Understanding your credit report and FICO score is the first step in beating these credit myths.
There are actually three companies that collect your financial information for credit reports. Some lenders will report your loan payments to all three or just one.
Your credit score is based on your loan history. If you’ve never applied for a loan, you won’t have a credit score.
Through the Fair and Accurate Credit Transactions Act (FACT Act), you have the right to get your credit report free from each of the three credit bureaus.
It’s illegal to deny someone a loan because of their race, gender or sexual orientation. The Equal Credit Opportunity Act (ECOA) lays out your rights as a borrower and banks denying a loan can get in big trouble.
The biggest credit score myths are those around getting loans and how your credit report affects interest rates. It's here that shady loan dealers want to feed you their credit score lies to scare you into a high-interest rate.