Credit Myths

You might have heard stories about credit and how credit reports work. Don't be fooled by misinformation. Here are some common myths about credit, followed by the facts.

You must give permission for your credit report to be issued.

FACT: Any credit grantor with a permissible purpose may access credit reports without the consumer's permission.

The credit bureau can deny a credit application.

FACT: Credit bureaus have no power to accept or deny credit. They only collect and report information.

After you pay off a debt, it disappears from your credit report.

FACT: A credit report shows the whole credit history. All debts - even if they're paid off - are included. Negative credit information can stay on your report for 7 years. A bankruptcy can stay for 10 years.

You're not responsible for debts on joint accounts if you didn't make the purchases.

FACT: On a joint account, both parties are held completely responsible for payment. If you pay your share but the other person doesn't, each of you gets the same negative credit rating.

A divorce decree separates joint accounts.

FACT: Divorce does not cause anything to happen automatically in your credit report. To protect your credit rating, pay off and close all joint accounts, then reopen new accounts as a single account owner.

Risk scores have replaced a credit report review.
ACT: Credit reports are still the number one tool used by creditors to determine your creditworthiness.



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