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Credit scores were never meant for consumers.

Implemented in the 1980s for lenders and banks to provide an algorithm-based assessment of consumers' creditworthiness, the clandestine, proprietary credit score models are the credit industry's secret sauce, and they sell it to every bank and lender on the market.

So it's no surprise that most consumers have misconceptions about their credit, especially when it comes to what hurts and helps credit scores. In fact, a recent survey found that 42% of Americans would prefer a letter grade associated with a credit score rather than the traditional three-digit number. A letter grade would presumably help consumers to better grasp where they rank in creditworthiness.

And most Americans rank pretty low. With the average credit score at 661 nationwide, according to Credit Karma, a majority of Americans have poor credit, which means most consumers would be hard-pressed to gain approval on mortgages, loans and credit cards. If they are approved, it's likely to be at exorbitant rates.

Polishing up your credit starts with understanding the ins and outs of credit scores. Here's your cheat sheet to debunking the top myths about credit.

1. FICO is the one, true credit score. While the FICO credit score is widely known, there is no one, true credit score. There are dozens of credit score models generated by each credit bureau and unique to different industries, such as mortgage lenders and auto insurance providers. Risk assessment isn't consistent from industry to industry or even lender to lender. For example, your credit score pulled by one credit card issuer is likely to differ anywhere from 5 to 50 points from another issuer.

Lesson: You can't predict what credit score a lender will assess you by. Since you can't keep track of dozens of scores, track one credit score, such as the free credit score (see "Are FAKO scores worthless?") provided by Credit Karma, for a general sense of your credit health. While the actual numbers may vary, you're often in the same "risk range" across all credit score models. As you build and improve the factors affecting your credit score, your scores should pick up across the whole spectrum of scoring models.

2. Checking your score is bad for your credit. There are two types of credit checks. Hard inquiries knock a few points off your credit score and are initiated when a financial institution pulls your credit report to assess you for a lending decision, such as approval for a mortgage or credit card. Soft inquiries do not affect your credit and are initiated as part of a background check, such as for pre-approved offers or as part of a hiring process. When you check your own credit score, it is considered a soft inquiry and won't affect your credit score no matter how many times you check.

Lesson: Go ahead and check your credit score as often as you'd like. You have nothing to lose and tracking your progress over time will give you more insight into what's affecting your credit.

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3. My credit score affects future job opportunities. Contrary to popular belief, potential employers don't look at your credit score. They actually pull your credit report, which is a data-rich document detailing your credit history. Employers look at your credit report as part of your background check, but they must get your permission before doing so. Take the pre-emptive step to review your full credit report for free at, which provides you with a free credit report once a year from each of the three credit bureaus. Regularly check your credit report throughout the year by spacing your free credit reports every four months.

Lesson: Your future job opportunities could be influenced by your credit report, so check your credit report regularly for errors and fraudulent accounts. The Federal Trade Commission has a quick guide on how to dispute credit report errors.

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