CONSUMERS risk misjudging their credit score by accepting a number of incorrect "myths" surrounding how data is compiled, according to a report out today. Research from information service CreditExpert found that half of UK adults do not fully understand what a credit rating is, with a significant number misled by incorrect "credit folklore". The most common misconception is that a previous occupant of a house can affect the current resident's rating. A survey from CreditExpert found that more than 70% believed this "myth", despite the fact that only people can have credit histories and not addresses. Almost two-thirds of adults believe that family and friends can harm their credit rating, research found. This used to be the case in some instances, but lenders are no longer allowed to take into account people with the same surname who live together when deciding whether to offer credit. But they can look at the credit reports of anyone who has a joint account or joint credit. Almost half of consumers erroneously believe it is the credit reference agencies that decide people's credit ratings and make a lending decision, and not the lender. Another myth is the existence of a "credit blacklist" containing the names of people who should be refused credit. CreditExpert said no such list exists and it is down to the lending institution to make a decision based on information they receive. It added that people also incorrectly assume they have only one credit rating. In reality, consumers will have a different credit rating each time they apply for a loan or credit. Jim Hodgkins, managing director of CreditExpert.co.uk, said: "With consumers' debt at an all-time high, being financially aware has never been more important. "Knowing your credit rating, understanding what it means and what will impact your credit score is a key part of financial management." Circumstances that do affect a person's credit rating include past debts, identity fraud, multiple loan or credit applications and bankruptcy. | 
