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Credit Score: Myths Vs. Facts

credit score

Credit Score 101: Heading link

How many of us wish that we could graduate college with an excellent Credit Score to go with our hard-earned diplomas? What is an excellent credit score anyways? And what are some benefits of having a perfect credit score? If you find yourself asking the same questions, please read on. Hopefully, by the time you are done reading, you should gain some basic knowledge about credit scores and how they can affect your life.

What is a Credit Score? 

According to Consumer Financial Protection Bureau, a credit score is a number assigned to a person that predicts how likely you are to pay back a loan on time.

How do credit score companies determine your credit score? 

Companies use a mathematical formula called a scoring model. A scoring model uses information from your credit report to create a credit score. So one way to think of this is the higher your credit score is, the more likely you will get approved for loans, apartments, and credit cards.

Credit Score Formula: Your credit score is calculated based on 5 things.

  1. 30% amounts owed
  2. 35% payment history
  3. 15% length of credit history
  4. 10% new credit
  5. 10% credit mix (types of credit)

Why would you want a good credit score?/ Benefits of a good credit score: 

  • Savings on interest rates
  • Better terms and availability on loan products
  • Access to the best credit cards (*low-Interest rates on credit cards and loans)
  • Insurance discounts
  • More and better housing opportunities
  • & much more!

Myths or Facts: Heading link


“I can’t get my first credit card until I’m 21, the official age of responsibility.”

Myth. You can apply for student credit cards and starter credit cards as early as 18. You can even get a credit card when you are a child if your parents/guardians (or anyone with a credit card) adds, you as an authorized user to their credit cards. Why is this good? You will start building credit at a young age. By the time you are an adult, you most likely will have great credit.

– Feel free to visit this page to see some of the major credit card companies and their age requirements:


“The more credit cards I have, the higher my credit score will be.”

Myth (sort of). It is not about how many credit cards you have, it is about how wisely you use them. However, it is important to note that the more credit cards you have, the higher the utilization rate is. So, in theory, more cards more = higher credit limit = more money you can use that allows you to stay under the 10-30% utilization percentage. Although having multiple cards may boost your credit score it is important to note that getting multiple cards in one short period may negatively affect your credit score. (Source)

When managing multiple credit cards:



“If I make a late bill payment, it’ll be stuck on my credit report for 7 years.”

Absolutely a fact!! It should be your main goal when it comes to building great credit to never miss a payment. (Source)

Now, if for some reason life throws a curveball at you and you miss a payment, do not panic:

  • Try to make up that payment as soon as possible. The longer a late payment stays on your credit, the worst it affects your credit score.
  • Call the company and try to negotiate. Ask if they can take off the late payment notice if you pay the debt.
  •  The more amount of late payments you have on your credit cards, the lower your score will be. Try to avoid multiple late payments.



“I need a credit score to get a house”

Fact. Lenders will need to look at your score for you to get approved for a loan. However, unlike common beliefs though, you do not need an excellent credit score to get approved.

The minimum score needed is as follows:

  • Conventional: 620
  • Federal Housing Association (FHA): (3.5% down): 580!!!!!
  • VA Loans (Veterans): No minimum score needed* (some lenders will have a certain requirement).
  • If you have any questions about house buying or credit score, you can reach out to Credit Rx at the end of this article!!


“I can close an old account to boost my credit score”

Myth. You may close the old account, which has high annual fees, or you no longer use it; however, please know your score on that card has been noted. So be careful not to close too many old accounts. Old accounts establish your credit age, which helps boost your credit score. (Source)


For additional myths and facts: You can watch this short video below!

Resources: Heading link

5 Credit Score Myths and Facts Heading link

Credit Cards 101 (Credit Card Basics 1/3) Heading link

Credit Cards 101: How to build your credit score ASAP and leverage your money Heading link

The 5 BEST Credit Cards For Beginners in 2021 Heading link