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RISMEDIA, June 16, 2010—When I get married, do my spouse and I get a joint credit score? If I get a raise at work, will my credit score go up? These are common questions asked every day by many Americans because credit scores are seemingly arbitrary numbers and credit reports are lengthy and unintelligible. It’s often difficult to separate fact from fiction.

Whether understood or not, a person’s credit score has a tremendous impact on their finances. The difference between a good credit score and a bad credit score can mean the difference of thousands of dollars over the course of a loan.

To help clear up the confusion, here are the top 10 credit misconceptions, including credit score myths that many people expect to impact their credit score, as well as surprising factors that actually impact credit scores.

What You Thought You Knew about Credit Scores:

When I get married, my spouse and I get a joint credit score: Not so. Each person has their own credit score ’til death do them part. However, when you open accounts jointly, that information will be reflected on both you and your spouse’s credit reports, for better or for worse.

My job/income impacts my credit score: Sorry, but making six figures, winning the lottery, or inheriting a fortune does not give you a good credit score because your net worth and income are not factored into your score.

Paying off credit card debt will boost my credit score 50 points: Depending on how much credit card debt you have, you may see your credit score increase if you pay it off. However, credit card utilization, how much of your available credit you are using, is the more important component of your credit score. Those with the highest credit scores have about 10% utilization.

I only have one credit score: There are several different credit score providers and each credit bureau provides their own credit score. However, all the companies use the same criteria to judge your credit worthiness, so scores basically fall within the same range of what is considered a poor, fair, good and excellent credit score.

Checking my credit score will lower my credit score: False. When you check your credit score at sites such as Credit Karma, it’s a soft inquiry that doesn’t lower your credit score at all. Only hard inquiries by lenders when they are making a decision of whether or not to grant you credit can lower your credit score.

What You Don’t Know about Credit Scores:

If you don’t use your credit cards, you aren’t helping your credit score: In order to have a good credit score, you must have available credit that you use responsibly. If you don’t have or use credit, you may have no credit history at all. If you do have credit, your credit score benefits the most from consistently demonstrating responsible use of credit over time.

Credit bureaus make mistakes: Nearly eight in ten credit reports contain a serious error or some sort of mistake, according to a survey by the U.S. Public Interest Research Groups. Because errors can negatively impact your credit score, it’s important to check your credit report regularly and dispute any inaccuracies you find.

Even if a bill or debt isn’t generally reported to the credit bureaus, missing a payment will affect your credit score: Any time you pay a bill late or don’t pay at all, that activity can be reported to the credit bureaus. Different companies have different policies about reporting late payments, but never assume that just because you’ve never seen a particular bill listed on your credit report that it can’t negatively impact your credit score if you don’t pay it.

Your credit score impacts more than your ability to get credit or a loan: Employers, insurance companies, cell phone providers and rental or leasing agencies all check this number. Your credit score can prevent you from getting a job or the apartment you want. In addition, people with bad credit scores tend to pay more for insurance premiums than those with good credit scores.

Having a variety of debt impacts your credit score: True. Auto loans, credit cards, mortgages and student loans all impact your credit score. In fact, the more variety of debt, the more responsible you appear to lenders (so long as you’re responsible with this debt).

There are many other myths out there, but these are the ones that seem to confuse people the most often. There is no magic bullet to getting a great credit score. Smart money management is the absolute key, but by better understanding what impacts and doesn’t impact this important three digit number, you can better build a good credit history over time, which saves you thousands of dollars over the course of a lifetime.

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