There is a lot of false information around credit scores so it’s important to get your facts from a trusted source.

Separating fact from fiction will ensure you don’t fall foul of the wrong information and damage your credit score. Doing your research before applying for a financial product will allow you to make an informed decision, giving you the greatest chance of getting the best financial deals.

We debunk some of the most common myths and help you understand your credit score a little better…

1) If you’ve never been in debt, you’ll have a great credit score

False: Credit scores allow lenders to judge whether you’re suitable for credit, using information about your previous borrowing and repayment history.

If you’ve never borrowed or only borrowed a small amount of money, then it’s harder for lenders to judge your habits. As a result, this uncertainty can unfavourably affect your credit score, as lenders can’t judge your level of risk.

2) Credit ‘blacklists’ exist

False: There is no such thing as a credit ‘blacklist’. There is a common myth that people with bad credit scores are put on a secret blacklist that lenders check when they assess applications.

Every financial institution has its own criteria used to determine whether to accept an applicant based on the information in their credit report and their credit score.

3) If you’ve got lots of money, your credit score will be great

False: Information about your savings and assets do not appear on your credit report, and are not taken into account for your credit score rating. If you’ve never borrowed credit before, or you’ve got a poor credit history, then your credit score could be low, regardless of how much money you have.

4) Odd missed payments won’t affect your chances of getting a mortgage or credit

False:It’s very easy to let time run away with us and accidentally forget to pay your credit card bill. However, these missed payments stay on your credit report for at least six years and lenders may worry you will miss payments with them too.

5) It makes no difference if you pay off your credit card balance in full

False: When you pay your balances in full, you are proving that you can afford your credit, which can have a positive impact on your credit score. Lenders offer the best deals to consumers who have good credit scores and have proved that they can repay their credit.

6) There’s nothing you can do about a poor credit report and score

False: Every credit agency has different criteria but there are some universal, practical things you can do to improve your credit information. These include

7) We are all offered the same deals on financial products

False: The better your credit score, the better deal you are offered on financial products. The higher your score, the better you managed your debt in the past, which makes it more likely you’ll be considered low risk and therefore be eligible for better interest rates and deals with borrowing money, or taking out a mortgage.

Justin Basini is CEO and co-founder of ClearScore