Your credit score is an important factor when applying for a mortgage, car finance or even a mobile phone contract, so it’s only natural that people worry about it.
Amidst a global cost of living crisis, financial pressures are only increasing and now more than one in five people are having to borrow money or acquire credit to keep up with bill payments.
One thing that isn’t helping financial worries is the myths that surround credit scores. These can make people panic and cause mental health problems. Money is one of the many causes of poor mental health in the UK, so we’re here to debunk these myths for your peace of mind.
If you’re worried about your credit score, continue reading our guide below and free yourself from negative emotions surrounding your finances.
I can be put on a credit score blacklist
A credit score blacklist is a scary concept but fortunately, it doesn’t exist. Many people believe that you can be put on a list that immediately results in you being declined for credit, but that’s not the case.
Lenders will assess your financial background before approving or declining your application, so just because you’ve been declined once, doesn’t mean it’ll happen again.
Other people in my household can affect my score
Your credit score is an individual asset, so you shouldn’t be worried about your household’s overall finances. The only time other people in your household may impact your credit score is if you open a joint account or mortgage with one of them. Your finances are then bound together, so if your friend or partner has a poor credit score, it may impact your ability to get credit.
I can’t get a loan with bad credit
While we believe you should do all you can to improve your credit score, you can still acquire a loan if it’s low. There are caveats to this, however, as the conditions of your loan will be much less favourable than someone with a good credit score.
This may include having a higher interest rate or having to secure your loan against an expensive asset like your home, car or jewellery. These items will then be repossessed if you fail to make payments on time.
Checking your own credit score lowers it
Some people believe that checking your credit score will lead to it dropping. However, that isn’t true. Credit checks can be split into two categories: soft and hard.
Soft checks happen when you check your own credit score online and these leave no trace on your report. Hard checks, on the other hand, do show up on your report and can lower them. However, hard credit checks can only be done by other organisations you’ve applied for credit from.
