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Monday mythbusting: 7 common credit myths debunked


Understanding the world of finances and credit can sometimes be easier said than done.

With so many misconceptions about the impact of borrowing it’s understandable that the thought of taking on credit can seem daunting.

However, while living within your means is vital there’s no escaping that credit is part of life and something that often can’t be avoided.

Remember, credit is a tool and like all tools, the most important thing is about how you use it.

Here we clarify some of the most common myths surrounding credit to help you understand your credit report and score a little better.

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1.      The less you borrow, the better your score

This is one of the most common misunderstandings we’re faced with when it comes to credit and credit scores.

While it’s only natural to think that your score won’t be impacted if you’ve never borrowed or only borrowed a low amount, this isn’t the case.

Your credit score plays an important part in helping lenders to assess your ability to repay.

Lenders judge your risk level based on your previous borrowing and repayment history so if you’ve only borrowed a little, it makes the decision harder and can have a negative impact on your score.

However, that being said it’s important not to overspend using credit. Maxing out your limit on your credit card can bring bigger problems than a low credit score so striking a balance is imperative.


2.      Your credit score can be influenced by family members

Worried that a family member’s credit score could impact your own?

Don’t panic. Credit scores are typically assessed on an individual basis and family finances won’t affect your score.

However, if you have a financial connection to someone, for example, you share a joint account with a spouse or you have a joint mortgage, your partner’s situation will be considered even if they’re not applying for a joint loan or product.

3.      Your address could be ‘blacklisted’

It doesn’t matter if the previous occupant of your home was on top of their finances or not, your credit score is a personal record so this will have no impact on your situation.

Again, the only way another person could influence your credit score is if you have a financial connection to them such as a mortgage or a joint account.

4.      Having savings and assets guarantees a good credit score

Information about your savings and assets don’t appear on your credit report and so don’t factor into your credit score.

This may seem surprising, but this is because your credit score isn’t based on what you have but how you’ve managed credit in the past.

If you have a poor credit history or have never borrowed before your credit score could be low.


5.      Your credit score will never change

As your credit score is based on your payment history and personal information, it’s unlikely it will always remain the same.

For example, missing a payment or something seemingly as simple as taking out a new credit card can have an impact on your score.

If you have a negative credit score there are steps you can take to improve this, such as paying bills on time, paying off debt and registering on the electoral roll to name just a few.

More information about improving your credit score can be found here.


6.      You can’t get credit with a bad credit score

Having a low credit score doesn’t mean that you can’t access credit in the future.

But it does mean that you’ll be offered credit at a higher rate of interest which can make repayments more difficult, lead to greater debt problems and have a further negative impact on your credit score.

However, that being said, there are credit cards and offers designed specifically for people with a low credit rating and are keen to improve their credit score.

Interested in rebuilding your credit score? Check out our guide here.


7.      All credit reference agencies use the same scoring system

You’d be forgiven thinking your credit score is a universal number, however, the reality is each credit reference agency uses a different system.

Some may score you out of 999 like Experian or out of 700 on Clear Score.

Not all lenders use the same agency when running checks so rejection by one may not mean you’ll be rejected by another.


If you’re worried about your credit score being impacted by debt, talk to Creditfix. Our expert team can offer support and advice to help you manage your debt.


We have a wide range of debt management solutions that could help you write off up to 81% of your debts

Check if you qualify

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