In a previous post, we looked at four of the common credit myths that still exist, and what you really need to know. Today, we will continue this topic by looking at four more common credit myths and truths.

At IPS Amarillo, we want to help you get into the home of your dreams. Just because you have made financial mistakes in the past doesn’t mean that you shouldn’t be able to own a home. You may have credit challenges, but we can help. Contact IPS Amarillo today to learn more about our lease-to-purchase program.

1. Checking your credit hurts your score

When you check your credit report, it is considered a “soft inquiry” and does not hurt your score. Since it is your personal information and you looking at your personal credit report, there is no reason for it to impact your score. This myth probably came from a misunderstanding of the difference between a soft inquiry and a hard inquiry. A hard inquiry is something that a lender does when reviewing your application for a line of credit. A hard inquiry will be added to your credit report and shown to other lenders. A hard inquiry can affect your credit score, a soft inquiry cannot.

2. You have just one credit score

The truth is that everyone has multiple credit scores because there are several different scoring models that are used by each of the three major credit bureaus — Experian, Equifax, and TransUnion. The credit bureaus don’t work together, which means that the information that one collects is not shared with the others. Additionally, your lenders might report credit information to only one or two of the bureaus, not all three. All of these factors mean that you will likely not have the same credit score with each of the three bureaus. The solution is to check at least one report from each credit bureau so that you can have a good idea of what your credit report and history look like.

3. All credit reports contain the same information

As we mentioned, not every lender reports your credit information to all three credit bureaus, which means that they don’t have the exact same information about your credit history. In fact, each credit bureau maintains its own separate reports on consumers rather than sharing the information they receive from lenders. Since you can expect that each credit bureau will have a different credit report, it’s important to make sure that you ask for a copy from each one so that you can present a more holistic picture of your credit history to your lender.

4. The more debt you have, the lower your credit score will be

This myth sounds fairly reasonable, which is why it is probably still being passed around. The truth is that not all debts are the same. There are actually good debts and bad debts. For example, a large mortgage loan is considered a wise financial investment and is therefore good debt. A large credit card balance, however, would seem to indicate unwise financial decisions and is considered bad debt.

At IPS Amarillo, we believe that credit challenges should not keep you from achieving your goal of becoming a homeowner. If you have been unsuccessful at obtaining a loan from other lenders, then contact us today to see if our lease-to-purchase option is right for you!