“Better pay and more savings equals better credit” – false
Good salaries and savings have no impact on a credit score, Selvem said.
He explained: “Although your income and savings are taken into account to determine your ability to repay the amount of money you will borrow, they have no bearing on your credit score.”
‘If you’ve never borrowed, you’ll get the best deals’ – false
Another common misconception online is that those who have never borrowed will get better credit deals and opportunities. However, Mr. Selvem also confirmed that this was false.
He said: “If you’ve never borrowed, you’re actually more likely to be rejected for credit cards, mortgages and loans with the best deals because there’s no way a lender to see that you will be able to make your payments successfully.”
‘Paying off your credit cards in full lowers your credit score’ – false
Paying off credit cards in full can actually boost a credit score.
Mr Selvem said: “Paying off your credit card statement balance in full each month is a great financial decision and can, in fact, boost your credit score.
“By paying off your balance, you can reduce your credit usage, which is better for your credit score.”