Five credit score myths busted

Credit scores have become the stuff of urban legend and there are some pretty scary theories around. But are any of them true? Well, we’ve put on our detective hats, taken a look at five of the myths doing the rounds, and separated fact from fiction.

credit-score-myths-busted

The "secret" credit score blacklist

So the story goes, there’s a secret blacklist you’ll be added to if your score isn’t very good. Lenders can then refer to this as they please, leaving your reputation forever damaged, as well as blocking you from ever getting credit.

Fact or fiction? Well, it’s a complete myth, of course! There’s no secret list for lenders to keep an eye on. There never has been, and there never will be.

The reality is far simpler. Your history is available for you to see at any time, it's not secret. And lenders each make their own decisions, based on their own lending rules, and your credit history.

Bad credit lasts forever

Once you’ve got a bad credit rating, there’s no coming back. Right?

Wrong again, because credit scores change month-by-month. Your credit history dates back over six years (72 months), so as the months tick by your past financial history drops off your record and a new month is added to it.

This means you have every opportunity to improve your score in future. Once you’ve completed your DMP there’s plenty you can do to start to rebuild your credit history.

Addresses are affected by bad credit

If you move to an address where a previous tenant had a bad credit score, you’re going to get their history whether you like it or not.

That’s how the legend goes, anyway, but this is another myth – if a previous tenant has a bad credit history, then it’ll move with them to their new home. You aren’t affected by other peoples’ credit scores (unless they have a financial connection with you, such as a joint account).

Paying your rent on time doesn’t add to your credit score

Despite paying your rent on time month after month, you don’t get any credit benefits for your excellent track record.

Actually, this one is true – rent payments don’t usually show on your credit history – but you can change that easily (and for free). If you sign up to CreditLadder, you can have your rent payments verified, and they’ll show on your Experian credit history.

Providing you pay your rent on time, this is a great way of building your credit history even whilst you’re on your DMP. Remember, though, if you miss any rent payment (or pay them late or in part), then this will also show up on your credit score if you use this service!

Your credit score is out of your control

The idea you can’t do anything to improve your credit score is also a myth. The number one thing you can do to influence it is to make sure your payments are on time (including your DMP) each month.

There are also other “housekeeping” things to do that help improve your chances when the time comes for you to apply for credit again. This includes making sure you’re on the Electoral Roll at your current address.

Also, make sure all your financial products are updated with your current address and the address on your Driving Licence is also up to date. In fact, doing so could also save you from a big fine, too.

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