Credit reports reveal a lot about someone’s past, both good and bad. Many have a financial history they would want nothing more than to forget. However, many are confused about what goes on a credit report and who has access to it. More importantly, some are concerned with how the report can impact their overall credit. 

This confusion has created a lot of myths about credit reports that are considered accurate, common knowledge. Below, we break down the top ten and most shocking myths about credit reports.  

  1. You Can End Up on The Naughty List

Contrary to popular belief, there is no official list that you are put on for creditors to deny you a loan. Creditors reject loans on various criteria, and even those who have good credit can be denied depending on the circumstances. These circumstances include:

  • Foreclosure
  • Bankruptcy
  • Late payments
  • Not enough credit history
  1. Good Credit Scores Mean Automatic Approval

Expanding on the first point, just because you have a good credit score doesn’t mean you will be approved for every loan. Other criteria, such as income, are considered during the approval process. Furthermore, each case is unique and dependent on your circumstances. You may be denied for other reasons, including: 

  • Employment history
  • Residence stability
  • Cash flow
  1. Parking Tickets Appear on Your Credit Report

Parking tickets do not appear on your credit report; however, unpaid tickets have the potential to impact your credit score. The best advice is to play it safe and pay for the ticket as soon as possible. There is no guarantee how lenders can view these outstanding payments. 

  1. Late Payments Don’t Matter if Balance is Paid

If you pay the entire balance of your loan, you may think that your late payments will be forgiven. However, this is not true. Late payments will remain on your credit report even after your entire balance is paid. It will take about seven years for these late payments to fall off your credit report. You must make all payments on time to avoid this stain on your credit. 

  1. You Shouldn’t Check Your Credit Report

Many people think that any inquiry on your credit report can be seen as unfavorable, which in turn drops your credit score. Depending on the type of inquiry, you should be in the clear since checking your credit report is considered a “soft” inquiry. 

It is wise to check your credit report frequently for many reasons. By reviewing your credit report, you will make sure that it is complete and accurate. Mistakes are likely to be made, and they can negatively impact your score if left unchecked. 

Furthermore, this can allow you to notice suspicious activity and prevent a fraudster from attempting to open a new account. If you see this activity, be sure to report it immediately before further damage is done. 

  1. You Can’t Dispute Your Report

You are well within your rights to dispute any inaccuracies in your credit report. Expanding on point 5, you should dispute a mistake on your report before it impacts your credit. Credit organizations are liable to make mistakes just like anyone else. Keeping an eye on your report can help you detect red flags and correct them sooner rather than later. 

  1. Anyone Can Check My Credit Report

Although you may think that your credit report is public knowledge, that’s not the case. The Fair Credit Reporting Act limits access to your credit report. This protects your financial privacy and prevents the general public from viewing it. 

Only specific business entities that have a designated reason to view your report can access your credit report. These entities include:

  • Banks/Lenders
  • Landlords
  • Employers
  • Insurance Companies

Also, there are sections of your credit report where you can check who has viewed your report.

  1. All Report Inquiries Impact Your Credit Score

As stated in point 5, “soft” inquiries do not impact your credit score. “Soft” inquiries include:

  • Checking your credit 
  • Any pre-approved offers you have from insurance companies or creditors

However, “hard” inquiries can negatively impact credit scores. Examples of “hard” inquiries include credit reviews to extend credit and come from: 

  • Lenders/Creditors
  • Employers
  • Landlords 

These “hard” inquiries will remain on your credit report for two years. A new “hard’ inquiry that you don’t recognize could be a red flag that someone is attempting to open a new account and steal your identity. These should be reported immediately.

  1. Bankruptcy is Permanently on Your Report

If you experienced bankruptcy due to a recent conviction, divorce, or medical bills, it could be hard to recover your financial standing. However, there is light at the end of the tunnel. Bankruptcy will not remain on your credit report forever. The amount of time bankruptcy stays on your report is dependent on the form of bankruptcy you filed. 

Chapter 7 bankruptcy will remain on your credit report for ten years. This is because no debt could be paid back, and creditors had to liquidate your assets. Chapter 13 bankruptcy remains on your credit report for seven years. 

The reduction in time is because some of your debt was able to be paid back. Although bankruptcy can impact employment and many other things, it’s not permanent. In the meantime, you can improve your credit score in many ways to recover. 

  1. Bad Credit Guarantees High Auto Insurance Rates

Although credit is one aspect insurance companies consider, this is not the only factor that will impact your insurance rates or ability to get insurance. Other factors include:

  • Driving record
  • Demographics such as age and marital status
  • Type of Insurance
  • Type of Vehicle

As you can see, you can have excellent credit but still need several ducks in a row to maintain reasonable insurance rates. One way to maintain decent auto insurance rates is by simply driving safely.

Certain states even prohibit using credit scores as a factor in distributing insurance. These states include:

  • California
  • Michigan
  • Massachusetts 
  • Hawaii

Understanding these myths will clear up the confusion surrounding credit reports. This will allow you to make logical decisions based on facts rather than common beliefs that aren’t true. 


  • Always make payments on time
  • Monitor your credit report
  • Make disputes when necessary

Also, don’t worry if you do something that negatively impacts your credit. Even bankruptcy isn’t permanent, and you won’t end up on a “Do Not Loan” list.