4. Credit scores and credit reports are the same: This is a very wrong conception among is that credit reports and credit scores are the same words that can be used interchangeably. In simple words, credit report is a collection of information about a consumer’s personal identification information, his liabilities, some financial-related public records, third party collection accounts, and inquiries about their credit report. Whereas, credit score is a numeric grade that is based on most of the consumer’s personal information. A credit score is nothing but a product that is sold along with a credit report, but it is never a part of your credit report.

5. Pay cash and increase the credit score: Using cash every time instead of credit cards will not help you increase your credit scores, instead using credit accounts is the best way to help you establish and build credit. As both credit and debit cards are just like an electronic check these are not the better options. In order to get qualified for the best rates for instance, if you are applying for a home loan or a student loan, you need to prove your skills of handing credit responsibly. Second way to build your credit score is to make sure that you do the loan and rent payments on time and in addition to that when you have high scores you will be offered with best and new services.

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