Most Common Credit Myths

20th May 2024

Fake news has been one of the biggest trends in recent years, with false information on all sorts of topics being spread online and widely shared. Sometimes it’s easy to spot when you are being told something which isn’t true. In terms of your financial well-being, it’s not always so easy to separate the fact from the fiction. If you are trying to understand why your credit score is low and you keep getting turned down for a loan, it’s easy to come across a website with false information. We’re going to try to dispel some of the most common credit myths to give you the power to make better informed decisions about your own money.

Credit Blacklists

Contrary to popular belief, there's no such thing as a credit blacklist. Each lender will look at your creditworthiness based on various factors, including your credit report, application details, and existing account information. While a history of poor borrowing or a lower than average credit score might narrow your options about which products you can apply for, there's no blanket blacklist.

Impact of Housemates

Your credit report is yours and yours alone and does not contain information about the finances of your flatmates or family members. The only exception to this is a situation where as well as being flatmates, you have a joint bank account or loan with them. Otherwise, their financial behaviour has no bearing on your personal credit score.

Relationships and Finances

Being in a relationship, whether you are living together or married, doesn't automatically merge your credit reports or finances together. Joint credit applications, such as for bank accounts or mortgages, are the only instances where your credit may become linked with someone you are in a romantic relationship with. If you know that your other half has had financial issues in the past and has a poor credit score, it might be wise to steer clear of the joint accounts until they have managed to improve their own financial situation.

Previous Occupants

The people who used to live in your flat or house cannot influence your credit score. Their history pf debt has no impact on your credit score. If you start getting letters from previous occupants demanding money, simply return mail saying that they no longer live there.

Credit Checks

Checking your credit report online usually has no adverse effect on your score. These checks, known as soft searches, are visible only to you. The same is true of using an eligibility checker online before proceeding to a full application. In fact, financial experts advise looking at your credit score at least monthly to make sure it’s still accurate.

Universal Credit Score

There's no one-size-fits-all credit score. Each credit reference agency calculates scores differently and uses its own scale. Lenders will look at credit report, application details, and past interactions, rather than a single score. It’s more important to look at the rating of good, average, or poor than it is to get hung up on the credit score numbers.