It’s time to do some credit myth busting!
There are a few misconceptions out there about your credit, and we want to help clear up some of the confusion.
We’ve put together a list of 5 credit myths that should be busted right away to help everyone achieve positive financial health.
Myth 1: Utilities and rent are counted on your credit bureau
One of the most common misconceptions about credit is that your rent and utilities are reported on your credit bureau.
Property managers, landlords and utility companies are not considered creditors, so they don’t report your payments.
While neither your rent or utility payments are part of your credit history, it’s important to make continuous and on-time payments monthly to maintain residency in your home and good financial habits.
Myth 2: Savings accounts build your credit
A savings account will not impact your credit score. However, lenders may reference your savings as part of your overall assets when determining whether to lend you money.
If you are looking to save and build credit, EP Climb’s Accelerator Program offers you the opportunity to do both.
If you are simply looking to build credit, EP Climb’s Credit Card is a secured card that helps you do just that.
Myth 3: Bankruptcy permanently ruins your credit
When you file for bankruptcy, your credit score dips to the lowest possible rating, and you acquire a bankruptcy status.
The length of time it takes to be discharged from your bankruptcy can vary—with some lasting as long as seven years.
Once you are discharged, you can start to rebuild your credit. Acquiring a secured credit card, like the EP Climb Credit Card is a good option for many.
With a small deposit, a secured credit card can help you rebuild credit and form positive financial habits.
Myth 4: Your Income does affect your credit score
Your income is not reported to any credit bureaus and doesn’t directly impact your score.
While it will not show up on your credit report, it is important that your income is able to cover your living expenses and your bills.
Credit reporting aside, living within your means is important to stay on the path to being your best financial self.
Myth 5: A lot of credit cards means you have good credit
It may seem like having a lot of credit cards is an indication of good credit, but that is not necessarily the case.
Having a lot of available credit that you are not using make is a liability to lenders. Access to money that you could spend in one day could be risky for lenders, and in turn lowers your credit score instead of increasing it.
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