Credits Myths Debunked: Gospel or Porkies

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Life is littered with myths, urban legends, fairytales and good old-fashioned gossip; the majority of which are unsubstantiated and have been perpetuated – and indeed, further fabricated – from person to person as the rumour mill gathers momentum. But then as we all know, hearsay makes the world go round, and for the most part is relatively harmless. That is, unless it stands as an obstacle to someone seeking help, especially of the financial kind.

There are individuals out there who perhaps need monetary advice and help when they get into a pickle, who won’t approach those companies who are dedicated to helping their financial cause, because they’re under the impression that certain omnipresent myths surrounding subject matters are gospel, as opposed to porkies. Pies that is, as in lies for the uninitiated. Successful cash loan firms such as Cash1Loans for example, exist to help those who have fallen on hard times pick themselves up, dust themselves down and start out on the road to fiscal recovery. Yet if would-be clients believe the bunkum they hear on the grapevine, who’s to say they ever reach out for assistance.

Thankfully we’ve set about separating the fact from the fiction beneath, by picking apart just a few of the most overheard myths which continue to do the rounds; in this particular instance focusing on personal credit and some familiar rent-a-quote statements you’ve probably been privy to on previous occasions.

My credit score is negatively impacted every time a third party checks my credit, right?

Wrong, give or take. If you’ve heard it once, you’ve heard it a million times before. The greater the frequency of you applying for credit, the bigger the hit your credit score will take as a direct result. Which isn’t exactly true you’ll be pleased to learn. Should you make tentative enquiries about a mortgage or car loan within a relatively short passage of time, then your credit score will remain largely unscathed. And that’s because the credit scoring system readily acknowledges that it might have to shoulder a few checks within an inclusive period, and pre-empting this (providing said enquiries are executed within a specified time frame) they usually tend to count as the single enquiry. Meanwhile checking your own credit score is a financially painless exercise too, as is when an existing creditor instigates a soft inquiry on their customer/you. Which they might trigger to determine their own risk at various junctures during an agreement.

Just as long as they receive their money, if I default on my repayments from time to time, it’s no big deal, is it?

You could look at it that way, but the chances are that if you do you risk losing more than you’ve ever gained. Although there might be times when it’s virtually impossible to meet pre-agreed payment deadlines, you should always try to, no matter what. Although if you can’t it may be worth have a word with the likes of Cash1Loans who’ll give you the SP on alternative, short-term funding means and much more besides. Essentially though this is no myth. If you consistently make late payments then your credit score will be compromised as you go forward as for your part you’re flouting the rules you signed up to in the first place. And no lender (current or future) will take kindly to this and moreover, continue to accept this. So be warned, than on agreeing to a lender’s terms and conditions, it’s your responsibility to adhere to your part of the deal until the end.

I’ve got credit cards coming out of my ears, so my credit score is impregnable, right?

Er, no. As while on paper this sounds like it should ring true, possessing a stash of credit cards does not necessarily equate to a bullet-proof credit rating. As you might be that someone is scraping minimum payments together, balancing one off against the other or simply that they’re clinging onto said cards due to not being in a financial position to actually pay them off here and now. If anything the opposite applies, in as much the more cards, the greater the perceived debt outstanding on them. Ergo the prospect of a more substantial debt could easily prohibit the debtor to acquire any new funding streams or extend the agreement they have in place. Picture it this way, if you’ve saddled with lots of credit cards and then require another loan, few loans company would even entertain the idea because the very first thing they’d do is question your ability to make these new repayments on top of existing debt.

I’ve heard that just so long as I keep paying minimum payments my credit rating will be fine

Then we’d question your sources if we were you then, as continually making minimum payments over a protracted period of time alerts potential new lenders that this may be masking a bigger problem behind the scenes. That being serious cash flow issues. Lenders want to observe histories of any outstanding debts being paid off, the quicker the better, so as to prove they have the ways and means. Always have and always will.

I guess nobody will give me any credit as I suffered with significant debt problems in the past?

Not entirely true. The further back in your personal history this event occurred the better, as after so many years your credit slate is wiped clean so to speak. Which effectively means that you maybe in a position to start over again, carefully rebuilding a credit rating. Unless of course you were declared bankrupt, which might hamper your plans for a lot longer.

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