Here Are The 3 Biggest Myths About Credit Scores That Can Ruin Your Finances
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The Big Deal About Credit Scores
Whether we like it or not, our credit scores can have a huge impact on our finances.
When we were house hunting it became clear to us that most lenders used credit scores to determine rates they offered.
So you can see how big of an impact your credit score can have on your finances.
Today I want to share how you can build up your credit score and some savings along the way.
Self Lender founder and CEO James Garvey joined me to chat about the ins and out of your credit score.
We'll also pop the bubble with myths people have been taught on how to increase their credit scores.
You can watch the full interview here or read the highlights below!
Myth#1: Fixing Your Credit Score is a Snap
The first myth I hear is that you can fix or increase your score overnight.
That is a big fat lie.
Your credit scores are calculated based on what is on your credit report.
Your credit report is a record of your history of payments on your debts and helps lenders determine your creditworthiness.
You have 3 credit reports, one with each credit bureau – Equifax, Experian, and TransUnion.
The biggest factor in your score is your payment history.
That means you have to establish over time a pattern of being on top of your payments.
Myth #2 One Missed Payment Isn't a Big Deal
Sadly as James pointed out your credit score is kind of like trust. It's easy to mess up through one mistake, but it takes time to rebuild it.
One way you can protect yourself is by automating your payments.
The second is that you two have a regular check-in (monthly at least) to review and make sure all of your bills and payments have gone through and you didn't miss anything.
Myth#3: You Need Credit Cards to Build Credit
The standard advice includes opening up credit cards so you can build your score.
Not only is that ridiculous on a common sense level (hey, take out debt to show me you know how to handle debt), but at the end of it all
Another danger is that for some couples, that credit card can be a temptation to spend more.
One or both spouses can find themselves carrying some debt.
If that's something that you're concerned about (and many are!), there's an option you can use to build credit and save.
Build Your Credit While You Save
If you want to raise your credit score and have something meaningful to show for it, go ahead and check out Self Lender.
With Self Lender, you can quickly open a credit builder loan based on your budget and at the end, you have a stash of savings you can use!
Thoughts on Credit Scores
Love to get your take – how do you feel about your credit scores?
And if you're looking to put more money towards saving, paying off debt, or investments, please take our free 5 Days to
It's designed to help busy couples find, save, and earn extra money on the side step by step.
This episode was originally released in September 2018. Notes have been updated in June 2019.