Credit Score Fact and Fiction: 10 Common Myths debunked. PART 2

Posted On May 28, 2019

Credit Score Fact and Fiction: 10 Common Myths debunked. PART 2

Excerpt from Canada Living May 2019 and Mymoneycoach.ca

I don’t want to take credit for being the author of this information and although I knew most of this information it is very well put together so “If it Ain’t broken – don’t fix it”

PART 2:

10 Common Myths Debunked:

6.   My Credit score is attached to my spouse’s since we share the same credit products.
   FALS: In order to build credit, you need to have at least one product that is either solely yours or where you are the primary account holder.
   My Comment: “A cell phone account held in a personal name is one product. Having said that- bear in mind that any arrears or contract breaks will also affect your score. “

7. I need a credit score monitoring service to protect myself.
FALSE: You can check your credit report annually for free through Equifax or Trans Union. To see your credit score , you’ll have to pay for it. Beware of free credit-monitoring services, as you may receive solicitation offers as a result of your contact information being sold.
My Comment: “ I have historically found that the credit shown from “Monitoring Services” was much different than from the Bureaus. Your best bet is an annual call to the bureaus – both of them – to see where you stand.

8. Good Credit is everything.
Most definitely FALSE – while good credit is important, it is not as vital as peace of mind. Many Canadians have great credit ratings but are carrying too much debt, which prevents them from working toward their financial goals, like retirement, and ca sour an otherwise healthy relationship with a partner.
My comment: “If you are great at paying bills and maintaining a solid credit rating maybe look at taking out investment loans and placing those funds in Mutual funds or RRSP to better prepare yourself for retirement.”

9. In order to build good credit I need to get lots of credit products.
FALSE: You can build credit with a secured credit card, an unsecured credit card with a low limit or even a cell phone contract in your name.
My Comment: “It is never to late to correct your Credit Rating – get help from a Credit Counsellor or lending specialist. The sooner you start a program the sooner your credit will improve.”

10. Bad credit will ruin me.
FALSE: It may be true for awhile. Credit can be built as well as damaged, depending on how you act. Most things will come off your credit report and stop impacting your credit score within six to seven years of last damaging activity.
My Comment: “ The biggest problem I see when talking to people in trouble is ATTITUDE. Many think the world owes them, the credit grantor gave them too much credit, their partner spends too much and on and on. Best solution is to look in the mirror and take responsibility- The sooner you do that the sooner your credit gets better.”

Neil “Mortgage-Man” McJannet
250-861-8758