Risk & Business Magazine CEO/CFO Business Today Magazine Winter 2018 | Page 27

CREDIT SCORE MYTHS
MYTH #2:
DEBIT CARDS AND PREPAID CARDS HELP BUILD GOOD
CREDIT.
While deposit-based cards like these can be used as tools to
teach responsibility, they are not included in a credit report
and do not affect your credit score.
MYTH #3:
CREDIT SCORES ARE LOCKED FOR SIX MONTHS.
False. Credit scores are variable from day to day based
on activity that positively or negatively impacts your
creditworthiness. Scores are not fixed for any time period. If
you apply for a loan and a lender checks your score, expect
them to check it again if you stop by and apply again months
later.
Some get this confused with a fraud alert. If you have
requested that a fraud alert be placed on your credit report,
it lasts for one year unless you choose an extended option.
Doing this does not lock your score. Instead, it requires
lenders to take extra steps to verify the identity of anyone
applying for credit in your name.
MYTH #4:
CHECKING YOUR CREDIT SCORE HURTS IT.
Not always. There are many monitoring services that you
can use to check your score that will not affect it. Your score
may be impacted if it is checked by a lender in the process of
obtaining a loan.
MYTH #5:
YOU ONLY NEED TO CHECK YOUR CREDIT SCORE IF YOU
HAVE A BAD SCORE OR RIGHT BEFORE YOU APPLY FOR
A LOAN.
This one is just plain wrong. Identity thieves love to get
their hands on individuals that don’t regularly monitor their
credit report/score. At the very least, check your report
once a year. You can obtain a free report
from the credit bureaus at
annualcreditreport.
com. This will give
you reports from all
three of the major
credit bureaus.
Monitoring more often than annually is recommended if you
can manage it. Also, be sure to check reports for minors in your
household. They are sometimes the target of identity thieves too.
The faster you catch an identity thief in the act, the easier it is to
undo all the damage they have done to your good name.
Perhaps the most significant fact to remember about credit scores
is that there is no one true score. There are three major credit
bureaus: Equifax, Experian, and Transunion. Each has slightly
different criteria, meaning that your score may vary by bureau.
When applying for a loan, don’t be surprised if the loan officer
says that your score is different than what you think. They may be
using a score from a different bureau.
Take these tips to heart and join the masses that are getting smart
about credit this month. +
Chris Preston began his banking career with Ohio Valley Bank in
1998. He currently oversees three branch locations in Ohio and
West Virginia. However, his passion is in business development,
where he assists local small businesses in developing and
expanding through sound financial choices.
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