When the topic is as crucial and confusing as ‘Credit Score,’ it is natural that there will be many misconceptions and myths. The concept of a credit score has intrigued all borrowers from the time they came into existence. While every borrower tries their best to level up their credit score, nobody knows precisely how it increases.
Whether you want to apply for a loan through a credit line loan app or in person, you will need to maintain a high credit score. The following sections discuss the top-7 misconceptions and myths about credit scores.
1. The More You Check, The Lower The Credit Score Becomes
While this statement is not entirely false, it is not an established truth either. The credit score is usually fetched in two ways – soft pull and hard pull. A soft pull is when you check your credit score by messaging the credit bureau. However, when you seek a card or credit line from a credit line loan app, the lender enquires about your credit score. Such enquiries are termed as ‘hard pull,’ and may impact your credit score. Hence, try not to apply for too many loans or cards at one time.
2. A Bad Credit Score Is Permanent
This myth is not without reason. When a borrower defaults on loan repayment, the transaction displays prominently in their credit profile for the next three years. And, if the borrower has defaulted on multiple EMIs, the history may stay there for ten years. That being said, it is not too challenging to push the credit score upward. For example, you may apply for a credit line from a credit line loan app and repay the EMIs on time. With every timely payment, your credit score increases.
3. The Higher Your Income, The Better The Credit Score
This is a genuine myth. A borrower’s income does not impact their credit score directly or indirectly. A credit bureau considers your income decent as long as you pay the EMIs on time. For example, if you avail of a loan from a credit line loan app and never repay on time, your credit score will be in a free-fall mode.
4. The Credit Score You See Is The Same As What The Lender Sees
You can check your credit score in two ways – seek the credit report from the credit bureau directly or use a credit line loan app to check the score conveniently. However, the score you see might be different from the score your lender uses. Hence, while the credit score you see might give you enough indication about your financial health, it may or may not guarantee a loan or credit card approval.
5. Debit Cards Are As Good As Credit Cards For Building An Impeccable Credit Profile
Uninformed investors or borrowers think that a debit card can also increase their credit score, like a credit card or loan. However, this is not correct. A fascinating way to build your credit profile is by applying for a credit line through a credit line loan app. Debit cards are considered prepaid, and hence, credit bureaus do not consider these cards while framing your credit profile.
6. Surrender Cards To Increase The Credit Score
If you think your card provider levies higher fees, you may consider closing your card. However, if you want to enhance your credit score, think twice before surrendering your card or closing your credit line app account. An active and well-maintained card allows you to increase your credit score.
7. A Bad Credit History Means Loan Rejection
While it is correct that a bad credit score hurts the prospects of loan approval, it does not always lead to a rejection of a loan or card application. Credit line loan app are more considerate towards borrowers with a below-average credit score. They may increase the interest rate to minimise their risks, though.
Conclusion If your credit score is low, but aspirations are sky-high, consider downloading a credit line loan app. Credit line apps offer low-ticket loans at reasonably easy terms. You can also get various value-added benefits. Moreover, repaying the EMIs on time enables you to increase your credit score and avail discounted interest rates.
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