Credit Score Quiz

What do you really know when it comes to your personal credit score?  How can you the sort through all those conflicting pieces of advice about what is good verses bad when it comes to your credit?  Everyone from your banker, to your neighbor and even your mother all seem to have different ideas about what is true.  Find out if you have the right facts by quizzing yourself with the below statements.    

True or False?  A high credit score always places you in the approval pile for any credit.  A low credit score will always put you in the reject pile.   

False!  It is rare that a credit score is the only factor in determining approval for credit.  Most lenders use many different factors, not just your score, when making the decision to grant you credit.  It is possible that someone without a job or has unsteady employment to be denied credit even with an extremely high credit score.  On the contrary, someone that has very steady and secure employment might be granted even if with a low score or little to no payment history.  

True or False?  A credit score does not factor in nationality, marital status, gender, race or religion.

True!  A credit score only represents information directly related to your credit worthiness.  With the incorporation of the Equal Credit Opportunity Act it is illegal for lenders to use any of this information in the decision to grant you credit. 

True or False?  Lenders do not have to disclose why they denied you credit.

False!  It is illegal to withhold the reason(s) why they denied you credit.  In fact, they are required to notify you in writing with the information regarding your denial in less than 30 days.  If you are ever denied credit, you have the right to request one free copy of your credit report used the denial decision.        

True or False? If you close an old account, it will definitely increase your score. 

False!  If you do close an old account, it will not always increase your score.  It is more likely that your score will actually go down if the account has an outstanding balance.  An old open account may sometimes even help your score since it shows lenders that you have credit that you are choosing not to use.   

True or False?  Information that is false or inaccurate may be erased off your report.

True!  You have the right to dispute any false or inaccurate information on your report.  Every time you view your report, you may file a dispute with the respective agency providing the report concerning any discrepancies.  The respective agency is then required to investigate your claim and release their findings to you in less than thirty days.  They will remove the discrepancy or explain why it was not removed.     

By properly educating yourself, you may determine the best course of action for you to take to increase your personal credit score.