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Four Myths About Your Credit History

Written by Robin Holland on May 24, 2010 in Credit  |   28 comments

Credit: Four Myths about Your Credit History By Robin Holland If you don’t learn to understand your credit, it can be a lifelong problem. You probably know you should be checking your credit report at least once a year. Do you understand what’s included in…

Credit history mythsCredit: Four Myths about Your Credit History
By Robin Holland

If you don’t learn to understand your credit, it can be a lifelong problem. You probably know you should be checking your credit report at least once a year. Do you understand what’s included in your credit report and how to read and do something about the information on it? Do you know what your credit score means?

When I work with consumers or lead workshops on financial literacy and credit, I’m always amazed at the misconceptions about credit histories, credit scores, and credit-reporting agencies.

Here are four myths about your credit history that I hear people proclaim frequently as truth:

Myth #1: “The credit-reporting agency is responsible for my debt (or credit) rejection.”

The credit report is an important part of the decision made by the creditor or lender to grant you credit or not, but it’s not the only one. Each lender or creditor has a set of criteria it uses to determine whether or not you qualify for that credit. Think about it: It’s much easier to get a gas card than a credit card or a mortgage. That’s because the requirements to qualify for a gas card are not as stringent as those for a mortgage.

It’s up to you to establish an on-time payment history and a good mix of credit. Then when the creditor pulls your credit report, the creditor can look at your history, along with the other information you have provided, to make a decision about whether or not to give you credit.

A lot of the details you may provide, such as your gender, income, and employment history, aren’t on your credit report. But you can take responsibility for your financial identity and make sure the information reported about your credit history will present a positive picture of you to creditors.

Myth #2: “The credit-reporting agency put the negative information on my credit file.”

A lot of people don’t understand how credit reporting works. Credit reporting agencies put information in your file when creditors send us details about your payment history. Credit reporting agencies are not out to get you, and no one pays us to report negative information so they can avoid granting you credit. We compile the data sent to us about your financial history and present it as a snapshot of your finances.

There may be inaccurate information on your credit report (and you should frequently check your file at all three nationwide credit reporting agencies for inaccuracies), and if you find any inaccuracies contact the credit reporting agencies to dispute them.

Myth #3: “My credit score is a part of my credit report.”

Your credit score is not included with your credit report. You can access your credit report and credit score from Equifax or one of the other nationwide credit reporting agencies, but your credit score and your credit report are not the same thing.

Your credit report is a history of how you pay your bills. It includes your credit accounts—mortgages, student loans, credit cards, and auto loans—and shows if you’ve been late or on time with your payments, the balances on these accounts, and who else has been looking at your credit report.

Your credit score is calculated from a formula based on the components of your credit report. While the score is a good reflection of you and your financial capabilities, there’s still room for interpretation. A lender or creditor will look at your score as another element in determining the risk in lending to you or giving you credit.

So you can get your credit score from a credit-reporting agency, but it is not automatically included with your credit report unless you purchase a credit report and score product or subscribe to a credit monitoring service that includes it.

Myth #4: “Credit-reporting agencies make the rules on how your credit history is reported and how long information stays on your credit report.”

Nope. The credit reporting agencies compile and report information about your credit history, but we’re not the decision makers. A government agency, the Federal Trade Commission (FTC), governs the credit reporting agencies. The Fair Credit Reporting Act (FCRA) outlines the rules on what credit reporting agencies can and cannot report and how long negative factors stay on your file.

Take a look at this post for more information on what is included on your credit report and for more information about how long these details stay on your file.

It is helpful for people to understand what a credit reporting agency does and how information gets into their credit report. The more knowledge you have about this and your credit history the more control you will have over your finances.

Read More.

The information contained in this blog post is designed to generally educate and inform visitors to the Equifax Finance Blog. The blog posts do not give, and should not be assumed to provide, personalized tax, investment, real estate, legal, retirement, credit, personal financial, or other professional advice. Before making any financial decision, you should always consult with the appropriate professionals who can explain your options, rights, and legal responsibilities, and advise you on any tax, legal, credit, or business implications that may result from those decisions. The views and opinions expressed by the authors of blog posts are their own views and may not be the views or opinions of Equifax, Inc. and/or its affiliates.


  1. jhon smith says:

    A very smart and diplomatic answer. It’s really appreciable and general.
    debt management

  2. LI-Cowgirl says:

    Great information and helpful. Very much appreciated, however, why does it take so long to report and why out of all 3 bureaus Equifax is always the lowers and longest to "catch up" – I have a score with Experian that is 749 and Equifax is still below 700. Does not make sense to me.

  3. Equifax Experts says:


    Great question! Your score will differ at the three credit reporting agencies since the information in your credit report may not be exactly the same at each credit reporting agency, and because there are different scoring models used. I don't know if the score you received from Experian is based on the same scoring model that Equifax used, or if the information in your Experian credit file is the same as in the Equifax file. This is why I always recommend that people check their credit reports from all three credit reporting agencies since the information can differ, which means the score will differ.
    –Robin Holland

    • Jane says:

      Hi! I keep hearing people say that if you contact a creditor that claims you owe them money, that it “resets” the 7 year period that debt shows up on your credit report. I’ve also heard that if you make a payment, it revives the debt for another 7 years – even if you pay it off. Is this true? And if it is, what possible reason besides “doing the right thing” would anyone have to pay off a debt that is anywhere close to expiring? Not only would they be out the money, but they would pay for it with continued bad credit. Finally, I have a collections item from 2005. Why wouldn’t this have cycled off in 2012? Do I need to contact Equifax to get this sort of thing removed? Why wouldn’t they do it automatically?

  4. Marcy says:

    I've been in the process of a refi. I have worked with 3 companies in the same 30 day period (I always get 3 quotes for any job). I always heard that if you have mulitple inquires within a 30 period for the same thing (refi) that the inquires would NOT effect your score. The last credit score I received a copy of, my score had dropped (Equifax) 10 pts, with Experian it went from 818 to 792 – the reason "too many inquires…". Is the 30 day period a MYTH?

  5. Ed says:

    If a credit score is based on a formula which takes into account such items as avaialble credit, then what impact is it when an company you have been paying off ahead of schedule lowers your credit limit because your credit score has gon down because you closed a credit card account. It seems to me that is the formula for going lower on your credit score. I would hate to have to take out more credit cards to raise my credit score.

  6. KeJuana says:

    ok im about to work on my credit i do not plan to open any new accounts but to clean up my negative reports i have so far. If an account says charged off or closed do i still need to pay the balance? Will paying the balance on these type of accounts help my credit report and my score? I feel like if its charged off and I pay it how does that help out

  7. Jennifer A. Freeman says:

    Hi KeJuana, Thanks for your question. We are working on a post for next month dealing with charged off accounts and how to deal with debt collectors. Check back next month for more information.
    Good luck with taking control of your personal finances!

    Editor for the Equifax Personal Finance Blog

  8. Paula says:

    My husband insist that if a credit card has a balance of $20,000 and you use $19,000 and pay it off each month that helps your credit report. I just did that and mine dropped 20 points???

  9. jon says:

    Even after you pay off your creditors your credit score is still bad and it’s not updated to a good standing account which I think it should be. I’ve paid a few bills and there still in a negative state.

    • EFX Moderator, EM says:

      Jon, It’s important to start establishing a new positive credit history. It’ll take some time, but it’s well worth the effort to be seen as creditworthy to lenders. Click here for tips on how to improve both your credit score and creditworthiness. Please come back and let us know what worked for you. Thanks for posting.

  10. Bob Lizana says:

    I just joined equifax to understand credit better because i got a 805 score from my bank.My credit paying is perfect and i couldn’t believe it was so low.
    last year it was 835.I only had 1 hard inquiry (by MY BANK ) since so it still doesn’t make sense.No bad credit issues to report (or contest) ………..how can you dispute a score.

    • EFX Moderator, EM says:

      Bob, I’m sorry to hear that. There are other factors to consider though. Has your credit limit decreased? Has your balance increased? Did you close any credit cards, which would change your average credit length? Click here for more information on how your credit score is calculated. I hope it helps.

  11. debbie Tomko says:

    I have been paying approximately 419.99 a month to each credit bureau to monitor my credit and get my credit scores…I just found out that these credit scores are not my FICO scores….Why can’t I get my FICO scores since I am paying this?? All banks look at your FICO scores for lending, not any other score….HELP…I just want my FICO scores…

  12. Debbie Tomko says:

    Good Luck Bob Lizana…The banks use different scoring methods…When I refinanced my home mortgage, my score dropped around 100 points…I have never been late on my mortgage, car loan, or credit…However due to inaccurate billing with medical facilities, it appears that I was late on these…in which 100 percent is covered my OWCP….I encourage all military personal, government employees to check their credit…It has been a nightmare for me….

    • EFX Moderator, EM says:

      Debbie, I’m sorry to hear about the troubles you’re having with your credit accounts. The issues you’re having are why it can be helpful to check your credit report regularly. Inaccuracies can have a negative impact on your score. Here are tips on how to check your credit report. I hope this helps.

  13. debbie tomko says:

    Not only that…if you file Bankruptcy…no matter how long ago, some banks hold it against you for the rest of your life…whether you were never late with them or not and whether you paid off your entire loan or not…per Chase

  14. PTA says:

    Why does my bank and credit union only report to equifax and not the other two.

  15. Doug says:

    This has been interesting reading. Looks like a lot of people are frustrated with the way credit scores and credit reports are used by creditors. I saw a number of suggestions to keep old cards open to maintain your good payment history. My insurance company just raised my house insurance because I had more open cards than they feel is a good risk ???? go figure. When I asked them how many credit cards I should keep open in order to not be a high risk, they said that was proprietary information. THIS IS A RACKET FOLKS. Congress needs to gets this under control. I have since switched insurance companies, but I think they are all using credit scores to charge more for insurance.

  16. Eric Hinkle says:

    Who decides when positive trade accounts are removed from a file? You claim the reporting agency is not the decision maker, so where are all my trade accounts from 30 or 40 years ago? I am experiencing some minor issues (insurance score) because the average length of trade accounts on my report is less than desirable. It’s not my fault that positive accounts have been removed; who is to blame?

  17. Jill Kam says:

    If negative account stay on your credit history for 7-10 yrs after last activity, is the date last reported considered activity? My husband and I filed for bankruptcy in 2007 and was discharged in 2009. We’ve worked really hard to keep our credit clean and stay out of debt. All was good until a HSBC, Orchard Bank credit card I had (since 2007 and maintained/not incl in the bk) was bought out by Capital One last summer. Capital One took over my account then closed it 2 months later without any info sent to me. After being repeatedly questioned they told me my account was cancelled because I had a bankruptcy. Capital Ones policy prohibits open accounts during bankruptcy so it had been cancelled and would be reported as included in my bankruptcy as if 2014!! I argued that the charges were post bankruptcy and I assured them I owed it and was paying, but they didn’t care and wouldn’t allow me to make payments. How can a credit card company apply their policies to accounts not held by them during a bankruptcy, then arbitrarily add it as included whenever they feel like it? Won’t this now stay on my history another 10 years?

  18. Catherine W. says:

    I had a $50 bill go to collection. I paid it immediately upon being informed of this but it was too late. My credit was tarnished. Now I cannot get a loan to buy a home that is being built. The entire loan will have to be in my husband’s name as if I am untrustworthy. Is this the treatment I can expect to receive for the next 7 years because of this one blemish? other than this one blemish my credit is spotless.

  19. dave R says:

    I have a few derogatory marks that should be off and they are not y is that. They are stupid mistakes with those no credit no problem loan places that I got screwed on during my previous marriage

  20. Mark H says:

    will doing a credit check start the 7 year clock again??????

  21. Anonymous says:

    Bottom line, pay your credit card balances below 20% utilization because the cc is 60% of your score!

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