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I was chatting with a few people the other day and the subject of credit history and credit scoring came up, as it does, and I was surprised at how little some people know about their credit and their credit score.

We were discussing what can cause poor credit, an everyone seemed to realise that late payments or falling in arrears with an account is bad for your credit.

And it is bad, probably the worst thing you can do as it has the most impact on your credit score.

Paying your accounts on time does help your credit, but only over time.  Just by making a payment on time does not magically help your credit; but doing so over a few years does.  Where as one missed payment can damage your score immediately.

There also was the misconception that a person’s credit score and credit can be affected by their partner or spouse.  This isn’t so, as long as the accounts are not jointly held, the account is the sole responsibility of whose name is on the account.  It does not become the responsibility of the partner or spouse just by marrying or living together.

This also brought up the misconception that when a couple get divorced they can designate who pays what bill or debt in the divorce and that person is liable to pay it.

In a divorce the divorce decree or papers can state who is to pay what bill/debt, but the original contract for that debt states who is responsible and that supersedes, or takes precedent over the divorce papers.  Meaning that the person whose name is on the loan is the one who is ultimately responsible for the loan, regardless of what might be agreed in the divorce.

There were a few other credit and financial myths or misgivings that were discussed, but the above were the main ones.

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