dont-believe-these-three-credit-mythsCredit scores and credit reports can be a bit of a mystery but having a good understanding of them will greatly benefit your financial future.

Myth: A bad credit score will stick with you forever.

Reality: Even if you suffer from something like bankruptcy or foreclosure, which does have a terrible impact on your credit, it doesn’t mean that you won’t have the opportunity to rebuild your credit. If you are responsible with your accounts, make all payments on time and continue to pay down your debt, it may take as little as a few years to rebound.

Myth: In order to have a high credit score you must earn a large income.

Reality: Your income is not a factor when it comes to credit scores. For those just starting out in the workforce thinking they don’t have high credit because they are on an entry level salary, that’s not the case. You start to build credit when you open your first credit card, take a loan out on your first car, start paying student loans, etc. It’s never too early to start building credit regardless of your salary.

Myth: Having too many credit cards is hurting my score.

Reality: The truth is your credit score can be affected negatively when you first open several credit cards in a short time period. But what is not true is that your score will drop simply because you may have several credit accounts in your name. As long as you are always paying the bills on time and keep the balances low, your credit score will actually benefit from having multiple accounts.