It is good to be concerned about good credit, but it is also important to have the correct information. Receiving the correct information about credit can make a positive change in your life, according to a credit specialist.
"I want to make available to your clients, family and friends, and everyone else whose financial lives you touch certain facts about credit that will affect them and any financial decision they have made or are about to make," certified credit specialist Julie Macc tells members of the Silicon Valley Association of REALTORS®.
Macc periodically updates area REALTORS® on important credit and identity theft information. Below are more myths she has added to her list of "myth-conceptions" about credit, which she asks REALTORS® to share with their clients:
MYTH # 1: You share a credit score with your spouse.
Untrue! Your spouse and your credit reports and credit scores are looked at individually, based on your Social Security number. If you get an authorized user account (also known as "piggybacking") for your spouse, that will show up on the report. However, if none of your accounts are joint, and you don't have any authorized user accounts, your score will not be affected.
MYTH #2: Your credit score only counts when you want to borrow money.
This is a huge myth. Some employers, auto insurance, homeowners insurance, life insurance, contractors bond look at your credit score and your credit history. Macc clarifies that in California, potential employers may run a credit check only for any potential management candidate that would be managing company or client funds, or government or banking jobs. Insurance agencies in California are not supposed to run credit checks on potential customers in the state, but other states allow it.
MYTH #3: Always pay your credit card balance in full and that will give you the best credit.
If you pay your balance in full every month, you will have no payment history. An ongoing zero balance account after six months it is typically looked at as an inactive account, which can also be closed due to inactivity. If you use the account every few months and leave a small balance (ideal amount is 1 percent) on it, it will help you.
MYTH #4: A co-signer is not responsible.
A co-signer is as responsible as the signer on the account. The co-signer's credit report is affected since it will show up on their credit report as a joint account, and if the person for whom they co-signed fails to make payments, it will have a very negative effect on their own credit score and late payments will appear on their report.
MYTH #5: If a judge in a divorce proceeding orders my spouse to pay a debt, it no longer affects my credit.
A judge's order does not negate an existing contract. Close all existing joint accounts and make sure they are all paid in full on time, even if your spouse was ordered to pay and you have to pay them in order to keep your credit intact.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please email or call the SILVAR office at (408) 200-0100.