Canadians are wrestling with historically high levels of household debt. In this environment, millions of you likely have your eyes on your credit score. Your credit score can help you can access or freeze you out of things like home ownership, renting, buying a vehicle, or applying for a credit card. Today, I want to go over three credit score myths to watch out for.
Checking your credit score damages it
This is a myth that many of you have likely heard all the time. Credit checking sites like Credit Karma have grown into popular sources of information for Canadians. Checking on your credit score through these types of sites, even multiple times a day, will not harm your credit score. On the contrary, this is a great way to keep track of it.
Wages impact credit score
Another myth suggests that a wage increase directly affects your credit score. The logic dictates that a higher income makes you a more desirable borrower. Your income is not reflected on your credit score. Of course, financial stability will impact your credit score. Often, a higher income will aid you in this pursuit.
Carrying a credit card balance boosts your score
There is an old myth that suggests carrying a credit card balance will boost your credit score. A general rule suggests keeping a credit card utilization rate below 30% across all your accounts. Of course, keeping a zero balance also does not help. Creditors need to see evidence that you are able to carry credit and pay it off in due order.
