Credit reports have a bit of a reputation. Mysterious. Complicated. Slightly intimidating. Add in years of half-true guidance from well-meaning friends and family, and a little bit of dubious social media advice, and it’s no wonder confusion sticks around.
So let’s clear the air. Here are some of the biggest credit myths… and what’s actually true!
Myth 1: There’s a credit ‘blacklist’
Let’s get straight to the point: there’s no secret credit blacklist.
Lenders don’t check a master list with your name on it. They review your credit report, your current situation, and apply their own internal criteria.
That means even if one lender says no, it doesn’t mean everyone will. Different lenders can make different decisions based on the same report. If you’ve been declined and aren’t sure why, the first step is to get clarity and check your report.
Myth 2: Missed payments stay on your credit report forever
They don’t. Late payments, defaults and county court judgements usually stay on your credit report for around six years. After that, they should automatically drop off.
Older negative information has less influence over time, especially if your recent credit behaviour is positive.
If you’re unsure of what’s currently listed, regularly checking your credit report helps you stay informed and spot outdated information.
Myth 3: If your credit score is low, you can’t improve it
This isn’t true. Your credit score is calculated using the information in your credit report. That means if the information changes, your score can change too.
Making payments on time, reducing credit card balances and avoiding too many applications can all help to improve your credit score over time.
Not sure which change would make the biggest difference? Use CreditKompass to explore how your actions could potentially affect your credit score before you actually make those changes.
Myth 4: No borrowing means perfect credit
It might seem like this should be true, but it’s not always the case. Lenders like to see evidence that you can manage credit responsibly.
If you’ve never had a credit card, loan, or mobile phone contract, there may not be enough information on your credit report to assess you properly.
Credit history isn’t about borrowing loads, it’s about borrowing responsibly - so don’t take on unnecessary debt just to build a credit history, use it wisely.
Myth 5: High income equals a high credit score
Income and savings don’t directly affect your credit score. Someone with a modest income can have an excellent credit score if they manage credit well. Likewise, someone with a high income can have a low score if they’ve missed payments.
Myth 6: Checking your credit report lowers your score
This is one of the most common credit myths, and it’s completely false!
When you check your own credit report, it’s only recorded as a soft search, which does not affect your credit score. In fact, regularly checking your credit report can help you, not hinder you.
The truth about credit reports and credit scores
There’s no credit blacklist.
Negative information doesn’t stay forever.
You can improve your credit score.
Checking your credit won’t hurt it.
Understanding what affects your credit score starts with knowing what’s actually on your credit report. Sign up to CreditKnowledge today for free and get credit confident.
CreditKnowledge is a credit broker, not a lender.
Editorial Disclaimer: This content is for entertainment purposes only. Opinions expressed here are the author’s alone, and not those of any bank, credit card issuer, or any other company. This article has not been reviewed, approved, or otherwise endorsed by any of these organisations. NB: The information on this page does not constitute financial advice, please do your own research to ensure that the product/service is right for your individual circumstances.