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By strict definition, a credit score is the amount of credit risk that’s calculated from an evaluated credit report by using a founded formula. There are several factors that could easily damage your credit score such as credit card misuse, no declared credit references, and late payments.

A good credit score range enables the credit holder to avail of regular loans that have much lower monthly interest rates. On the other hand, a bad credit score range only entitles the credit holder to bad credit loans that involve expensive monthly interest rates and difficult contract conditions.

To avoid having bad credit scores, you have to get a regular credit check. Checking your credit score on a daily basis is an efficient way of safeguarding it. You can accomplish this either on your own or with the help of a credit protection service.

You could be a more effective credit user if your knowledge about your credit score is well-founded. Through the years, there have been so many facts and fallacies about the elusive credit score. Take a glimpse at some of them.

The Facts About Credit Scores

Given are some of the established facts about credit scores:

1. There are actually three major credit bureaus.
   
   Some people often though that there was only one credit bureau. These three credit bureaus—Experian, TransUnion, and Equifax—have the capacity to track data on how credit holders use their credit. Each one is able to maintain a credit score for each consumer that they handle. In the end, you get to have three resulting credit reports with different credit scores. Three credit bureaus often yield different credit reports. Therefore, the credit scores also differ significantly.
   
   
2. There are people who don’t have credit history.
   
   If you’re the type who would rather use cash than credit, then you won’t have a credit history. None of the three credit bureaus will have any credit report to maintain. Without your credit history, you won’t have any credit score at all.
   
   
3. Credit scores and credit reports are not the same.
   
   A credit report shows the history of credit use, which includes every account that you were able to open in your name, and your history of payments. On the other hand, a credit score is the figure produced from the data provided by your credit report.
   
   
4. Checking your own credit score will not hurt.
   
   When your potential creditors or even when you check your credit report, you don’t have to worry about your credit score being negatively affected. An accumulated hard inquiry because of loan shopping is considered as one inquiry, which may not affect your credit score at all.

The Fallacies About Credit Scores

Below are some of the fallacies about credits scores:

1. Your credit score gets hurt when you always check your credit report.
   
   This isn’t true at all. The only reason behind a credit score is to see how likely you will not pay your loan. It’s often perceived as a warning sign when your credit report is checked by a financial institution.
   
   
2. Your credit score gets hurt when you check it.
   
   Just like your credit report, you won’t hurt your credit score when you check it. Whether you get it free or pay for it, you won’t negatively affect your credit score at all.
   
   
3. Your credit score gets hurt when you window shop for the best possible loan.
   
   If you’re looking around for loans and end up asking for quotes, lenders will be conducting hard inquiries. Hard inquiries will lower your credit score. However, since this is a common practice, a system has been established to prevent hard inquiries from affecting credit scores. It’s either the inquiries will be viewed collectively as just one inquiry or it will not impact the score.

It is ideal for credit holders to know the facts and the fallacies about credit scores. May some of the these tips enlighten you as you continue using your credit.

Kedy is an active blogger who is fond of sharing interesting finance related articles to encourage people to manage and protect their finances. She also covers topics on credit protection and credit monitoring.