A credit score is a very important numerical expression in the countries Credit Score system is using. It’s based on credit reports that are processing and serving by credit bureaus. Most of the lenders, companies and other organizations use credit score while deciding to calculate the risk of new credits or other lends. Accessing the credit score of someone needs authorizing access and it’s securing in trusted system now. Lots of countries like Australia, India, United Kingdom, United States and South Africa are using this system for a long time. System is closed to detailed knowledge about score collecting ways of bureaus so it created lots of myths. Some old bureau workers and experts wrote books about myths and other most wondered things. How many payments types are not affecting credit score?
First myth about credit score is bank overdrafts. People believe that bank overdrafts are effective on credit score but they are not. Bank overdrafts start to affect your credit score only if you couldn’t pay it and knowledge went to collections center. If a collections member called you about your late credit payment, it means that your credit score started to be affected from payment problem. It’s true that some banks or other credit systems wait till payment problem goes to collection agency for playing with credit score but for some banks and credit systems, only accessing of collections agent to late payment is enough for it.
Another popular myth about credit score is income. People think that more income means more credit score and less income means less credit score but it’s not true. Income is only become important when your credit payment is late. It’s true that your employment history and last situation are listing in credit report but income is not on the report. So if your salary is low, it doesn’t mean credit score will be decreased or if your salary is high, your credit score will be boosted.
Insurance payments are what people mostly ask to credit experts. It’s true that all insurance companies check credit report for deciding the insurance level but they never report your early or late payments to credit bureaus. It’s an unsigned agreement between insurance companies and credit bureaus.
Mothers mostly ask to credit experts about child support and credit report. According to credit experts, child support never affects any credit report. But if you fall down behind of your payments, credit bureau will start to investigate it and will find the child support. If there are late payments continuously and you are taking child support, it means your credit report will be affected significantly. It’s also common that when credit bureau started to investigate about late payments and problem is going on continuously, you may get arrested and sued for late payments. Same system is working also for alimony.
Cell phone and utility payments are also not affecting credit score. It’s true that like insurance companies, most of the utility or cell phone companies search credit score before taking application. But none of them give information about payment history of you till you get too behind of the payments. But if payment is getting more and more problematic, most of the utility and cell phone companies goes to collection agencies for solving the problem and it means your credit report will be decreased.
It’s a common misbelief that checking the credit report for many times affects credit score. If you check the report from the credit bureaus, a legitimate third-party., FICO or other authorized ones, you will never get any decrease on your point. But if your lender started to check your credit score continuously, it means an alarm and your account will be seen as hard inquiry.