There are 4 main credit bureaus that affect our personal finances: Transunion (which used to be ITC), XDS, Experian and Compuscan.

Transunion conducted a survey where they asked consumers many questions about credit reports and between 40% – 70 % of consumers got the questions wrong.

In this article, we take a look at some of the questions asked and debunk several myths about credit scores.

1. Does a credit report show your bank balances?

50% of people said yes, the credit report does show your bank balances.

The truth is that when they give you a credit score, they don’t look how much money is in your bank account.

2. When someone draws your credit report, they can see how much you are earning, or which income band you fall in to?

In other words, if you get a salary or your income band increases, then your credit score goes up.

70% of people believed that if your salary went up, so did your credit score.

This is wrong. The credit bureau, and therefore the credit report, does not contain that information, which means that if your salary increases, it doesn’t mean an increase in your credit score.

3. Does having children or other dependents affect your credit score? If a family member, like your brother or mother, is declared bankrupt, will it bring your credit score down?

No, it won’t. Each person’s credit score is assessed individually, and unless you apply for joint credit (to buy a house, for instance) then they look at both people.

Having dependents doesn’t affect your credit score.

READ MORE: Should I take out a personal loan?

4. The credit bureaus decide whether to give you credit or not?

This is not true. The credit bureau keeps the information. The store or the bank where you are applying for credit takes that information and decides whether to grant you the credit or to turn you down.

ALSO READ: What is good debt and what is bad debt?

5. 'I’ve never borrowed before, so my score must be great'

If you have never borrowed credit before then it’s difficult for lenders to assess how reliable you are. This can negatively affect your score and consequently the financial products you’re offered.

6. 'I’ve got several credit cards but I always pay my bills, so this won’t affect my score'

Having multiple credit accounts open, even ones you don’t use can damage your credit score.

In this case, it’s all about balance – not having too few or too many accounts open at one time.

Having lots of open credit accounts shows lenders that you have access to a large amount of credit (even if you don’t plan on using it).

READ THIS: What is responsible credit?