Biggest Misconceptions About Credit Score Debunked

Bangalore: Nowadays to apply for a loan or credits it has become mandatory that you should have a high credit score. According to rating on your credit scores the insurance companies, cable companies and even utility providers will decide on the rates or deposit amounts that will be charged on you. But often it is seen that like many other important things in life, even the credit scores are often misunderstood. There are many myths about the credit card scores that are going around about what hurts or improves.
Let’s have a look at seven popular myths about credit scores and credit reports:
I cannot check my credit card report as it will hurt my credit card score : 
There is no harm in checking your personal credit report. Usually while you review your own credit report that is called as a “soft pull,” or “soft inquiry,” that will be seen on a personal credit report and in addition to that this will have no impact on your scores.  It is advisable that everyone should at least annually check their credit report.
When lenders or others check your credit card score then it is called as a “hard enquiry” and this can affect your credit card scores.  Sometimes hard inquiries are shown to other lenders in order to represent new debt that might not be shown on a credit report as an account. Thus hard inquiries can really affect your credit scores but soft enquires don’t.
Employers should not check a job applicant’s credit : 
This myth is wrong it is actually legal for an employer to pull and review a credit report of a job applicant before hiring him or an employee. But yes the employer should seek job applicants or employees permission for this reviewing. In some of the fields like finance, government and banking agencies have to often review credit reports before hiring any person as they might have access to large amount of money or any confidential information. But it is advisable for employers to just check the financial habits or failings of a job applicant instead of checking their credit report.
By paying cash instead of using credit card might increase my credit score : 
Using cash every time instead of credit cards will not help you increase your credit scores, instead using credit accounts is the best way to help you establish and build credit. As both cash and debit cards are just like an electronic check these are not the better options. In order to get qualified for the best rates in order to for instance apply for a home loan or a student loan you need to prove that you can manage your credit responsibly. Second way to build your credit score is to make sure that you make loan and rent payments on time and in addition to that when you have high scores you will be offered with best and new services.
My academic background can affect my credit scores : 
Your Academic background or education level is never part of a credit report, so it will not affect your credit scores. Only debt related information is included in credit reports. Therefore, information about loans, credit cards and payment history, as well as bankruptcy, tax liens and civil judgments will be reported.
Other information like income, investments or assets such as stocks or bonds will also not be included in a credit report. In addition to that there is no information about savings accounts, checking accounts, certificates of deposit or other non-debt banking relationships etc. Additionally, factors like race, gender, marital status, national origin or religion are also not included in credit report
Credit Sudhaar is India’s first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy.
Courtesy : Silicon India