my credit score determines whether or not i get credit
false:
lenders use a number of facts to make credit decisions, including your FICO score. lenders look at information such as the amount of debt you can reasonably handle given your income, your employment history, and your credit history. based on their perception of this information, as well as their specific underwriting policies, lenders may extend credit to you although your score is low, or decline your request for credit although your score is high.
a poor credit score will haunt me forever
false:
just the opposite is true. A score is a "snapshot" of your risk at a particular point in time. it changes as new information is added to your bank and credit bureau files. scores change gradually as you change the way you handle credit. for example, past credit problems impact your score less as time passes. lenders request a current score when you submit a credit application, so they have the most recent information available. therefore by taking the time to improve your score, you can qualify for more favorable interest rates. see how improved scores can lead to savings.
credit scoring is unfair to minorities
false:
scoring considers only credit-related information. factors like gender, race, nationality and marital status are not included. in fact, the equal credit opportunity act (ecoa) prohibits lenders from considering this type of information when issuing credit. independent research has been done to make sure that credit scoring is not unfair to minorities or people with little credit history. scoring has proven to be an accurate and consistent measure of repayment for all people who have some credit history. in other words, at a given score, non-minority and minority applicants are equally likely to pay as agreed.
credit scoring infringes on my privacy
false:
credit s coring evaluates the same information lenders already look at - the credit bureau report, credit application and/or your bank file. a score is simply a numeric summary of that information. lenders using scoring sometimes ask for less information - fewer questions on the application form, for example.
my credit score will drop if i apply for new credit
false:
if it does, it probably won't drop much. if you apply for several credit cards within a short period of time, multiple requests for your credit report information (called "inquiries") will appear on your report. looking for new credit can equate with higher risk, but most credit scores are not affected by multiple inquiries from auto or mortgage lenders within a short period of time. typically, these are treated as a single inquiry and will have little impact on the credit score.
should I close my old accounts to raise my score
no:
in fact, it might lower your score. first of all, any late payments associated with old accounts won't disappear from your credit report if you close the account. second, long established accounts show you have a longer history of managing credit, which is a good thing. and third, having available credit that you don't use does not lower your score. you may have reasons other than your score to shut down old credit card accounts that you don't use. but don't do it just to get a better score.