December 12, 2024
Top Five Myths About Credit Scores Debunked
Explore the top five myths regarding credit scores and how we debunk them as the UK's leading credit building mobile phone network.
When it comes to credit scores, there’s no shortage of confusion and misinformation. These myths can make understanding and improving your financial health far more daunting than it needs to be. To help you take control of your credit with confidence, we’re debunking the top five myths about credit scores.
Myth 1: Checking Your Credit Score Hurts It
Reality: There’s a big difference between a "soft check" and a "hard check" on your credit. Checking your own credit score is considered a soft check and doesn’t affect your score at all. In fact, regularly monitoring your score is a smart way to stay informed about your financial health. Hard checks, on the other hand, occur when a lender reviews your credit during a loan or credit card application. These can slightly lower your score, but the impact is temporary.
Pro Tip: Use tools like the Boshhh Mobile app (available for iOS and Android) to monitor your credit score in real time without worrying about damaging it.
Myth 2: You Need to Carry a Balance to Build Credit
Reality: Carrying a balance on your credit card doesn’t help your credit score; it can actually harm it by increasing your credit utilisation ratio. This ratio compares the amount of credit you’ve used to your total credit limit. A high utilisation ratio can signal risk to lenders, potentially lowering your score.
The Truth: Paying off your balance in full each month is the best way to build and maintain a healthy credit score. Not only will you avoid unnecessary interest, but you’ll also show lenders that you manage your credit responsibly.
Myth 3: Closing Old Accounts Improves Your Credit Score
Reality: Closing old accounts can sometimes hurt your credit score rather than help it. This is because your credit history length is a factor in determining your score. The longer your accounts have been active and in good standing, the better it reflects on your financial behaviour.
Better Approach: Keep older accounts open and in good standing whenever possible. If you’re not actively using a card, consider making small purchases and paying them off each month to keep the account active.
Myth 4: Your Income Directly Affects Your Credit Score
Reality: Your income doesn’t directly influence your credit score. While lenders might consider your income when approving a loan or credit limit, it’s not a factor used in calculating your credit score. Instead, your score focuses on your repayment history, credit utilisation, account age, and credit mix.
Focus On What Matters: Build a strong credit score by making payments on time, maintaining a low utilisation ratio, and diversifying your credit accounts. If you’re rebuilding your credit, consider tools like Boshhh Mobile’s credit-building SIM plans, which report payments to credit agencies.
Myth 5: A Poor Credit Score Is Permanent
Reality: Your credit score is not set in stone. While it may take time and consistent effort, you can rebuild and improve your score. Positive financial habits, such as paying bills on time, reducing debt, and avoiding unnecessary credit applications, can gradually improve your score over time.
Start Small, Think Big: Services like Boshhh Mobile offer an easy way to rebuild your credit. With guaranteed acceptance and no credit checks, their SIM plans enable you to make consistent payments that contribute to improving your credit profile.
How Boshhh Mobile Can Help You Take Control
Boshhh Mobile offers more than just mobile connectivity—it’s a tool for financial empowerment. With guaranteed acceptance, no credit checks, and credit-building SIM plans, Boshhh provides a straightforward way to take charge of your credit score. Plus, the Boshhh Mobile app (available for iOS and Android) lets you monitor your progress in real time, giving you the confidence to make informed financial decisions.
Final Thoughts
Don’t let myths about credit scores hold you back. Understanding the truth behind these common misconceptions can help you take the right steps towards improving your financial health. Whether it’s monitoring your score, paying off balances, or using services like Boshhh Mobile to rebuild your credit, small changes can make a big difference over time.
Ready to take control of your credit? Visit boshhh.com and start your journey today.
