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The Resource Center Credit Fraud & Credit Monitoring | article

Common Myths About Your Credit Score

You probably know the importance of maintaining a good credit score, but do you know what actually goes into determining it? Deciphering your credit report and credit score* can be a challenge in itself, so it’s no surprise that a number of myths have circulated about how it’s accumulated.

Here are five of the most common myths and the truth behind them:

MYTH 1: Closing old credit accounts helps your score.
Reality: Closing an old credit account can actually hurt your credit score, because the credit rating agencies value your ability to responsibly use those accounts over time. By maintaining older accounts, you’re developing a history of responsible credit management, which can help your score. Using your accounts a few times a year and quickly paying off your balance can also help your score, while closing accounts or opening too many too quickly can hurt it.

MYTH 2: Regularly checking your credit score can hurt it.
Reality: Checking your credit has no bearing on your credit score. In fact, you can request a free copy of your credit report from each of the three major credit bureaus every year. Also, there are online services like Identity Guard® that would let you see your free credit score in exchange for trying their service. But whether you request your credit report, check your free credit score or use a more in-depth credit monitoring service to help you stay on top of your credit report, you don’t need to worry about hurting your score. If anything, close monitoring can help you identify changes that may affect your score.

MYTH 3: Every credit report and score you get is the same.
Reality: The three major credit reporting agencies (Equifax®, Experian® and TransUnion®) don’t share data with each other — and the information that’s reported to them about you may not match exactly — so your score can vary between the three. If you’re closely monitoring your credit, its best to check your score with all three credit bureaus to make sure there aren’t any errors on your reports.

MYTH 4: It’s impossible to achieve a perfect credit score.
Reality: It’s possible to score a perfect 850 if you pay your bills on time and have the right mix of credit and “good” debt (student loans for example). The credit agencies typically monitor your last seven years of activity, so if you have a perfect financial record over that period, you will score very highly. A score above 750 is generally considered to be very good and will allow you to get favorable rates on loans.

MYTH 5: Your spouse’s credit score can affect your score.
Reality: While activity on joint accounts will be reflected in the credit scores of all users, your spouse’s credit score is not directly related to yours. It’s the activity on the accounts you operate individually that will be reflected in your credit score.

Continuing to learn the reality of what goes into your credit score will help you determine what you need to do to achieve better credit standing.

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*The scores you receive with Identity Guard® are provided for educational purposes to help you understand your credit. Lenders use many different credit scoring systems, and the scores you receive with Identity Guard are not the same scores used by lenders to evaluate your credit.

Credit scores are provided by CreditXpert based on data from the credit reporting bureaus.

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