A good credit score is key to accessing a mortgage and getting good terms on other types of loans. Your credit score can also be a factor in renting an apartment, qualifying for financial products and services, and determining how much you pay for car insurance. Here in Louisiana, drivers with exceptional credit scores pay, on average, less than half of what those with very poor scores are paying. In fact, drivers with very poor credit scores pay more for insurance on average than drivers with DWIs.

Last month, we covered some basic information about credit scores. In this article we go a little deeper to dispel some common myths.

Myth #1: Removing negative information will greatly increase my credit score.
Missed payments and other negative information do have an immediate, noticeable, negative effect on your score, so it’s understandable to think that the best way to increase your score is to get them removed, but it’s not that simple. To begin with, if the information is accurate, trying to get it removed could be classified as fraudulent activity and carry legal consequences. It’s also the case that delinquencies impact your credit less as they get older, so dealing with older debts is not always the credit-building strategy with the highest impact. Of course, if the information is erroneous or you have been a victim of identity theft, you should take steps to remove the erroneous information and ensure that it does not happen again.

Myth #2: Getting the right products will automatically build my credit.
A good credit score cannot be achieved without at least one active, open trade line, and fortunately there are some good products out there specifically designed for building credit. However, these accounts will only help build credit if they are paid on time and not over-utilized. Remember that good credit is intended to be an indicator of overall financial stability and reliability. That’s why the first step in all of our credit counseling and education is to take a look at the budget. Once you have a balanced budget, then you can make a realistic plan for building credit and reducing debt.

Myth #3: If I pay someone to fix my credit score, they can get my score up quickly.
Building credit takes time. Unfortunately, some individuals and businesses seek to prey on those with poor credit by promising a specific score increase in a short amount of time. One common tactic they use is to dispute all negative information on the credit report, which can boost a person’s score for a very short period of time until those debts are validated. As mentioned above, this is fraudulent. Open disputes can also block or delay your ability to get a mortgage.

Fortunately, you don’t need to pay anyone to get good, reliable help with your credit. Our HUD-certified housing counselors offer credit counseling for free and can help guide you through a personalized plan to build your credit score and achieve your goals.