Understanding credit and how you got the score you have can be confusing. How do you know what’s true and what’s a myth about bad credit? Your credit score changes nearly every day, and is a big factor when applying for a loan on big ticket items such as a house or car. In an effort to make credit less confusing, here are six common myths associated with bad credit that can be debunked.

6 Bad Credit Myths

Credit can be confusing, and Auto Credit Express wants to help clear the air on any questions that you may have. We get asked questions daily from people looking to get a bad credit auto loan, and there are some bad credit myths that need to be cleared up:

I have to have debt to establish credit.
Myth:
Fact:
I have to have debt to establish credit.
Building your credit does begin with opening a loan or line of credit, but you don’t have to be constantly in debt to build your credit. It looks better to creditors and lenders if you're able to pay off your balances each month in full.
Medical Debt doesn't affect my credit score.
Myth:
Fact:
Medical debt doesn't affect my credit score.
In the eyes of the credit bureaus, debt is debt. It's important to pay off all your debts instead of being negligent and letting them get out of hand. With the new FICO Score 9 model, however, medical debt (including collections) doesn’t get treated as harshly as other late payments and collections.
Checking my credit report will damage my score.
Myth:
Fact:
Checking my credit reports damages my credit score.
When you request your credit reports, it’s considered a “soft pull" and is listed as a soft inquiry on your credit reports. Soft inquiries have no affect on your credit score. You can check your credit reports for free from each of the three major credit bureaus – Equifax, Experian, and TransUnion – every 12 months at no cost.
My spouse and I share our credit score.
Myth:
Fact:
My spouse and I share our credit score.
You may share last names, your house, and maybe even the vehicle, but not your credit score. This myth comes from the fact that shared credit cards and loans equally affect both credit scores – whether you pay on time or miss a payment, no matter who’s responsible for making the payments. Remember to check both scores before applying for joint loans for cars or credit cards.
Closing old credit accounts is good for my credit score.
Myth:
Fact:
Closing old credit accounts is good for my credit score.
An account’s age affects your credit score. Generally, the longer it’s open and active, the better. Older accounts show a lender you can maintain your credit and monthly payments over a longer period of time. It leads creditors and lenders to believe you're less likely to make mistakes than those new to credit may make.
Having a high credit score is the only way to get an auto loan.
Myth:
Fact:
Having a high credit score is the only way to get an auto loan.
While having a high score is great and makes the auto loan approval process easier, not everyone has a good score. Luckily, there are special finance dealerships that are signed up with lenders that are experts at approving credit-challenged car buyers. But finding them can be tricky.

Being on Top of Credit Facts

If you believed these six myths, don’t feel bad about it. But now that you know the truth, utilize what you’ve learned and take a step forward to establish great credit.

Fully understanding your credit and how the system works is a powerful thing to know when shopping around for big items, especially if you need a bad credit auto loan. If you need help getting connected to a local dealer with the lenders you need, let Auto Credit Express help.

Our network of dealerships works with credit-challenged consumers to help them find auto financing. We want to connect you with one of these special finance dealers near you for free. Simply submit our online auto loan request form to get the process started right now.