When you want to buy a home, you know that good credit will be necessary. You may have heard some things about your credit score that just aren’t true. Read on to set the record straight on some of the most significant misconceptions about credit.
Checking Your Credit Only Gives You Knowledge
Checking your credit score or report will not lower your score. The only way checking a score is damaging to a credit score is in the form of credit inquiries. This is when a lender, employer, or other merchant checks your credit in order for you to either gain employment or open a new line of credit. You have the right to review your score without it being impacted.
You Shouldn’t Carry Balances
The best way to keep a high credit score is to use a credit card and pay the balance off in full each month. It’s a false belief that carrying a balance is an excellent way to increase your credit score. You need a low debt level to maintain a good credit score.
Your Age And Income Have Nothing To Do With Your Score
It’s natural that older people who have a longer credit history have a better shot a good credit score, but your age has nothing to do with your score. It all depends on when you established credit. Some people started their credit histories early because their parents opened accounts for them. Others needed to wait awhile before opening their first credit card account.
Your income also is not a factor in determining your credit score. It may be true that if you have a higher income, it’s easier to stay out of debt, but the amount of money you make has no direct impact on your score.
You Cannot Access Your Credit Score For Free
You have a legal right to obtain a free copy of your credit report once a year but, your credit score isn't included in this report. There are free services that are outside of your credit report that will give you your credit rating, but you need to search for them. It’s a good idea to check your credit report periodically, but you should also know your score especially if you're getting ready to make a big purchase such as buying a home.
Your Credit Matters More Than You Think
While you know your credit score matters when you head to get a home loan, you may not know just how many entities take your credit into account when you apply for them. Some things you may do where your credit score matters:
Apply for a job
Apply for a credit card
Rent an apartment
Sign up for phone and Internet services
Get other utilities in your home
Your credit history gives a picture to the world to let them know if you’re financially stressed. If you have gone through rough patches, there are always ways to bring your score up. If you had a judgment ruled against you in a lawsuit, for example, that would only appear on your credit report for a certain number of years. Lenders will often allow you to explain bumps in your credit report as well. Understanding credit is half the battle to a good score!
I'm John Mahan, Sales Associate with William Raveis Real Estate, Harwich Port Office.
Throughout his childhood, John Mahan spent summers on Cape Cod at his parents’ home in Dennis Port. His intro to the Cape was, as he puts it, when his parents “carried me down the stairs at Sea Street Beach when I was a week old.” With a lifelong connection to Cape Cod, it seemed only natural for John and his wife, Mary, to move to Harwich – where they still reside – with their two young children in 1996.
Prior to moving to Cape Cod, John lived in the Worcester-Auburn area where he worked for Mass Electric for 10 years and was a member of the International Brotherhood of Utility Workers. When John and his family moved to the Cape, he worked at NSTAR for six years.
John began his career in real estate in 2002 when he joined Team Waystack Realty in Harwich Port. He has been a consistent top producing realtor in the Harwich area for the past 20 years. John’s approachable demeanor, combined with an integral understanding of the Cape Cod residential real estate market, have allowed him to build trusting, long-term relationships with his clients – both sellers and buyers.
