The question is, are you concerned about the right things? Many Americans hold mistaken beliefs about credit scores. The array of misinformation on television and in hearsay from friends and neighbors only compounds the problem. Following, learn about 10 commonly held myths about credit scores — and the corresponding truth. According to Andrew Housser, the following are the top ten myths about credit scores and credit reports. 

Myth #1: A credit score is a credit report.

The credit report is a detailed listing of all your debts and payments, going back throughout your entire payment history. It shows creditors’ names, the amount owed, the highest balance owed, the available credit, whether the account is open or closed (and who closed it), the number of times a payment was past due and whether the account is in default. A credit score is a number between 300 and 850 that is assigned to your record, based on complex formulas incorporating all the data in the credit report.

 Myth #2: If you are not in default, there is no need to check your credit report. Everyone should check his or her credit report once a year to be sure the report contains no erroneous information; visit Annual Credit Report for a free, no obligation copy of the report. 

Myth #3: Checking your credit report damages credit.

Reviewing your own credit information has no effect on a credit score. Neither does a credit report review by prospective landlords or employers. 

Myth #4: Everyone has one credit score.

In fact, the data compiled by three different credit scoring agencies (Equifax, Experian and TransUnion) form the basis for three different credit score calculations. The resulting scores might vary slightly among the three agencies if they have slightly different information, but they will be similar. 

Myth #5: Married couples share a credit score.

If all of your accounts are joint-accounts, your scores will likely be similar, but each individual maintains a unique credit record and credit score. On the flip side, after a divorce, you will need to follow protocol to have creditors remove one party from a joint account. 

Myth #6: Shopping for a loan destroys credit.

It is true that “hard inquiries” — examinations of your credit score in preparation for extending credit — can have a small negative impact on credit. However, credit bureaus take into account that consumers might inquire about a loan from multiple mortgage companies or auto lenders. If multiple inquiries are received from the same type of lender within a 14-day period, the credit scoring companies do not count each inquiry against the borrower. Note that credit card account inquiries to open new accounts are counted individually. 

Myth #7: To improve a score, close unused accounts.

An important component of a credit score is available credit, or the unused credit that has been offered (on a credit card, for instance) but not used. Closing unused cards removes those available balances from the equation and can actually lower your score. Today, some banks are automatically lowering limits or closing accounts for you to reduce their own credit exposure. If your debt load is manageable, the effect on your score should not be extreme. 

Myth #8: To boost credit fast, just pay off bills.

Credit scores reflect performance over time. Scores will not change overnight. 

Myth #9: For a fee, vendors can fix a bad score.

Again, credit scores show historic behavior. Be cautious about companies that claim to “fix” or “repair” credit. You yourself can remove inaccurate information. Beyond that, be aware that some companies send credit scorers a deluge of letters asking that they verify – and in the process, remove — all past negative information. If and when truthful information is verified, however, it will quickly return to the credit report. 

Myth #10: Never get help — it is too hard on your credit.

It is true that credit counseling, debt settlement and bankruptcy all can cause significant black marks on your credit. If you are in real trouble, however, you can and should seek help. Which option you choose will depend on the severity of your situation. Credit counseling can help to manage bills, and lower interest rates and monthly payments to creditors. Debt settlement firms can negotiate to lower the principal amount of your debts, typically providing a faster path to debt freedom than credit counseling. Bankruptcy, an even more serious alternative, should be discussed with a bankruptcy attorney. 

Credit is important, but knowing the truth about credit might be even more important. Before taking action that might hurt or help your score, check your facts to be sure your actions will help your financial picture 

Note: This information was provided for educational purposes only and is not to be considered credit repair advice of any kind. Debt Regret, Inc. does not assist clients with the modification, improvement or correction of credit entries, credit scores or credit reports. The settlement services of Debt Regret may have a negative impact on some clients’ credit reports and or credit scores.