Are you struggling to move forward financially because of your credit issues?

According to financial experts, there are many myths that prevent persons from having great credit so that they can build their financial lives.

If you are ready to build your financial life and build a career, register now for our upcoming class.

Myth #1 - You have to be wealthy to have good credit.  

False. 

Your income has no causal effect on your credit score, nor do factors like race, ethnicity, address, age, education, criminal background, or whether you own a home.

Myth #2 - If you pay all your bills on time, you’ll have a good credit score.

False. 

Even if you pay all your bills on time, you may not have a credit score. Why? The only way to generate a score is to have at least one creditor that reports monthly payment information to the credit bureaus (whether you paid on time, late, or not at all).  Typically, the only businesses that report this way are credit card companies and mainstream lenders.  Without at least one (open and active) credit card or installment loan, your credit report may be “unscored due to

insufficient credit history.” Those with no credit scores have limited access to credit and may be offered products with high rates and less desirable terms when they do borrow.

Myth #3 - Everyone has a credit score.

False. 

According to research 19 percent of adults—and 46 percent of those in low-income neighborhoods—have no credit score. How does this happen? The credit bureaus either lack sufficient information to generate a credit score (remember, you need at least one credit card or one loan to generate a score) or have no record of the person at all.

Myth #4 - To build credit, you have to go into debt.

False. 

You do not have to go into debt to build credit; you can build and sustain a prime credit score by opening one credit card, using it every month to pay for a small expense, and paying your bill in full every month. A credit card, if paid in full every month, is the equivalent of a 0 percent interest loan.

Myth #5 - Having a lot of credit cards is bad for your score.

False. 

The scoring system does not look at how many cards you have, but how you use your cards. To build a strong score, you must pay at least the “minimum balance due” on time, and you must keep the balance on each of your credit cards below 30 percent of the credit limit at all times. If you go above 30 percent on even one of your cards, it signals to the scoring system that you may be in financial trouble, which can lower your score by 20–50 points.

Myth #6 - Micro Finance, payday, and auto-title loans, if managed well, can help you build a credit score.

False. 

Most payday and auto title loans are “single repayment”

loans, which are typically not reported to mainstream consumer

credit bureaus. So, the most ubiquitous payments and products in low-income communities do not help consumers build credit.