Your FICO credit score is one of the most important parts of your financial life. It can help you find your dream home, get you cheaper rates on insurance and even help you land a job.
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.
Basic Myths about Your FICO Score
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.
I Have Just One Credit Score
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.
Everyone Has a Credit Score
Your credit score is based on your loan history. If you’ve never applied for a loan, you won’t have a credit score.
I Can Get My Credit Score Free Once a Year
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.
Credit Scores are Unfair to Women and Minorities
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.
FICO Credit Score Myths About Loans
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.