These are things that are unknown to most people in relation to credit score

Even if you apply for car loan, home loan, personal loan or credit card, the commercial bank will check your credit qualification. The credit score is a three -digit number between 300 and 900. Many aspects including your payment history, total credit mix, credit use ratio (CUR) affect your credit score. There are many myths about credit score. Here, we are aiming to remove some of those myths.

These are some common myths:

1. Credit scores show you how much debt you have

It is important that you have a loan, but in terms of credit score, your credit use ratio, payment history and how many years of your credit accounts are being operated.

2. Disabled of old accounts will strengthen your credit score

This is not true, on the contrary, closing old credit accounts will reduce your average credit history. With this, your credit consumption ratio increases. Which damaged your credit score.

3. Sometimes missing a payment

It is unrealistic. A single missed payment can negatively impact your credit score. Especially if your credit history now starts, the missing payment will make your score a huge. Payment history is an important aspect. This is about 35 percent of your score.

4. A credit card is enough

It is good to have only one credit card for financial discipline. But, according to your requirements, you can assess your payment capacity and do credit card beyond one that can increase your credit score. Having a long credit history can help you increase your score in a long time.

5. Debit card can also help in credit score

Debit card activity has no effect on your credit score. This is because Credit Bureau, such as KRIF and High Mark, do not take into account debit card activities. Only credit cards such as credit cards and loans affect your score.

6. It is not good to check your credit score often

The soft inquiry is to check your credit score. This has no effect on your score. Hard inquiry only affects your score. Nevertheless, their effect is very low.

Reference: This article is only to educate on credit requirements like loan, credit card and credit score. High interest rates and risks like hidden charge come with risks HT Telugu Does not encourage. We recommend investors to discuss with certified professionals before taking any credit.