Top 25 Myths Of A 650 Credit Score

A 650 Credit score is a rarely understood topic, and there is a myriad of myths and misconceptions regarding it. It’s absolutely ok to have questions, and we shall attempt to break through a few of these myths in the paragraphs that follow.

This is the most common myth that exists. There are different credit bureaus and credit reporting agencies, and each one is updated by creditors every month or sometimes more frequently. These credit agencies may not have the same credit information regarding an individual, so a similar credit score is impossible.

1. An Individual Can Have No More Than One Credit Score

An individual’s income and occupation are not included as part of the credit score calculating formula. Your credit report contains no information on your income, which may be of vital importance to your lenders but is unrelated to a credit score and credit report. 

2. A Good Job Makes for a Good Credit Score

Bankruptcy will only stay on the credit report for a period of 6-7 years. After that, this information will be removed, allowing you to start fresh. Bankruptcy will impact your credit score for as long as it shows on your report, but this damage is not permanent.

3. Bankruptcy Leaves Your Credit Score Irrecoverable

Another major misconception in people's minds regarding credit score is that becoming debt-free will suddenly lead to a perfect credit score of 800. This is not true! A credit score is not based on the amount of debt you have; rather, it is a summary of your credit behavior. 

4. Zero Debt Equals Perfect Credit Score

This is thought to be a quick fix for a bad credit score, but it’s not. There is a total of five determinants of credit score, one of which is the utilization ratio. If one credit card is closed in the hopes of achieving a higher credit score, the available credit goes down, and the debt utilization ratio increases.

5. Closing Credit Cards Will Improve Your Credit Score