A Common Lie About Credit Scores

One of the biggest myths about credit scores makes me laugh.

A manager of mine, with two college degrees stated this lie.

Recently a major twitter account re-stated the same lie.

What is this lie? I’ll tell you at the end of this article.

But first, let’s consider what comprises your credit score.

This image comes directly from one of the major credit bureaus.

What do you need to build your credit, based on this list?

You require consistent payments over a long period of time, with few recent accounts, in a variety of credit types.

You will only reach the HIGHEST credit scores if you have multiple credit types, such as credit cards and revolving loans (car loans), as well as a mortgage.

And that LAST point is where people start to believe that lie.

You may be guessing what the lie is, when I tell you that my credit score refutes their lie.

My credit sits above 780 in every single month, without fail. This places me in the top percentage of Americans and allows me access to the best credit products.

I possess ZERO loans to my name, and I pay my credit cards in full each month.

My credit score, which usually sits above 800, earns me the lowest rates at every bank, and allows me very deep lines of credit. In emergencies I have used 0% interest from credit cards to finance my short-term needs.

Yet, what is this lie?

The lie told about credit: “you must BE IN DEBT to obtain a high credit score.”

No. You must be consistent in payments, and have more than one credit card over a long period of time, in order to earn a credit score worthy of the best loans and highest lines of credit.

That’s it. It’s that simple.

In a future post I’ll explain why the multiple credit cards matter to your credit score, and ability to obtain the loan of your dreams.

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