Your credit score is a critical factor for lenders as they decide whether to approve a credit extension to you. We provided some helpful background information on credit scores and the credit system in the United States previously. Given the importance of your credit score, understanding exactly what it is, how its calculated and what determines is it vital. We’d go as far as saying that your credit score is the most important number in our lives. In our efforts to improve the public’s knowledge about credit scores we created a short quiz. Which of the following statements are true about credit scores? We’ve listed below 9 statements of which three are true, and for each we provide an explanation. Hopefully, after reading this post, things around credit scores will be clearer.

1. You can’t improve your credit score by much

Is the above statement about credit scores true or false? Some people worry that after a negative occurrence for example, reported missed payments on a credit card, its impossible to recover. This is a misconception. The above statement is false. There’s always a way to improve your credit score. No matter how poor your situation might be, you can start working your way up with good behavior and responsibility. In fact, just the passage of time is a positive for your credit score. This is only the case if you continue to make on time payments and avoid some of the typical mistakes. For example, keeping your credit utilization rate low and limiting the number of inquiries will help.

2. You need a credit card to build your credit history

Given the similarities in the names, some people think that you improve your credit scores only by your usage of credit cards. This is inaccurate. Any form of credit that gets reported to the credit bureaus will contribute to your credit score. This includes mortgages, lines of credit, loans for automobiles, student loans and even some insurance and brokerage products.

3. Your credit score can be improved overnight

Many credit card vendors, blogs, or “experts” online claim to have the formula for fixing your credit score overnight. However these are all clickbait and marketing titles designed to get your attention. You cannot improve your credit score in any meaningful way overnight. But as also noted above, over a period of several months you can see a decent amount of improvement in your credit scores. Improving your credit score takes time, and there are no quick fixes. It’s an ongoing process that depends on many factors, including your past mistakes.

4. Requesting a credit report will not damage your credit score

Does requesting a credit report hurt your credit score. It does not, the above statement is true. This misconception stems from consumers confusing a request for your credit report with a hard inquiry. There are many different ways that you can check your credit score. A lot of companies today offer free reports, but there’s usually a catch. For example, Credit Karma offers access to your report from two of the Credit Bureaus. In return however you permit Credit Karma to use your information to market financial products. However, the important thing to mention is that checking your credit score or credit report won’t damage your score. 

5. Missed payments definitely damage your credit score

What happens if you miss a payment on your credit card or worse, your mortgage? Surely that is going to have a negative impact on your credit score. The answer to this is actually more complicated. It comes down to the definition of “missed”. If your payment was due on the first of the month and lets say you forgot to make the payment till the 5th, you are probably OK. In that example, your lender most likely will not be reporting a late payment. Lenders generally have a specific cut off period for what they’d consider a “missed” payment. So the above statement about credit scores is false.

6. You can delete your credit history

Deleting your credit history would be a way of resetting your credit score. There’s a big misunderstanding when it comes to deleting credit scores. No, you absolutely cannot delete your credit score and start all over. The above statement is false. The reason why people think that’s because there is a way to remove negative items on your credit report. However, this doesn’t mean getting a fresh start. Instead, it’s a way of fixing any false negative reports by disputing it with the credit reporting agency. Don’t think that you can magically get a second chance after years of negative reports.

7. You can still get a credit card with a low credit score

Many people think that they can’t get a credit card if they have a bad score. After all, if credit card lenders are worried about repayment, surely they will avoid consumers with bad credit scores. This is in fact inaccurate. Two options available to consumers with bad credit scores are unsecured credit cards and secured credit cards. These cards usually have mechanisms that secure the lender from added risk. Some require a deposit, have lower limits. The interest rates on the cards are also often quite high.

8. There’s a universal credit score

Given its importance, many people think they have one credit score, similar to how they have one social security number. However, there are three major credit reporting agencies:

  1. Experian
  2. Equifax
  3. TransUnion

These credit bureaus track, monitor, and shape your credit report based on which your credit score is defined. All these three reports can be different as the bureaus each have slightly different approaches. Therefore your calculated credit score is often slightly different among the various credit bureaus. The above statement is false. There is not one universal credit score.

9. You need an excellent credit score to get a mortgage

Finally as you think about which of the following statements are true about credit scores, we come to one of the most asked questions. Do you need an excellent credit score to get a mortgage? To answer this lets look at some data from the New York Fed:


The chart above shows the average credit score for mortgages in the United States at origination. What the chart shows is that 90% of mortgages originated in the United States in recent years had a credit score above 650. According to Experian, a credit score in the 670-739 range would be considered “good”. Therefore, the above statement is false. You do not need excellent credit to get a mortgage, but it does need to be good.

So, which of the following statements are true about credit scores?

In the end only two of the above statements are true about credit scores. Requesting a credit report will not damage your credit score and you can still get a mortgage with only “good” credit. This is important to know as regularly accessing and checking your credit reports and scores is good practice. Doing this will help you notice any issues with your credit score sooner rather than later.