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What are some common misconceptions about credit scores?

On Behalf of | Aug 14, 2023 | Bankruptcy

A credit score is a number that represents a person’s credit history and tells lenders how risky it is for them to lend someone money. Many people are aware of their credit score, but may not know much about things like how to increase their score and how to repair a poor score.

Here are a couple of common misconceptions about credit scores and repair.

Bankruptcy will ruin a credit score

Often, people worry about the effect that filing for bankruptcy will have on their credit score. While it is true that bankruptcy will temporarily lower a score, the filer can build their score back up over time. This is especially true since bankruptcy can make it easier for people to make their payments on time, which is one factor that greatly impacts credit scores.

Checking a credit score will lower it

When people cite this myth, they may be thinking of how credit scores can temporarily decrease when applying for something like a loan or credit card. However, simply checking on the score through a credit bureau will not lower the score. In fact, this is a good thing to do from time to time as it lets people know whether they are on the right financial path and enables them to spot any financial anomalies.

When people learn about some of the common misconceptions about credit scores and repair, especially when it comes to bankruptcy, they can make better financial decisions that increase their credit scores in the long run.