Myths and Facts about Credit

Almost everybody is familiar with the term credit but a lot are not familiar with the answers to what credit is. In our world today, it has become a very common word that has a plethora of applications. The term credit can be seen as both elementary and highly important while sadly maintaining a near ambiguous aura.

In the commercial and financial world though, it evokes strong reactions that also transcend into fear and realization of its hold on people’s lives. It is safe to say that most people with any level of financial freedom or power have at one time or another dealt with credit. It is such a fixture nowadays that the modern world is reliant on it and even thrives through its sheer force. It is a known fact that not a lot of people really know what credit is.

Myth 1 – Credit Card companies do not send application forms via mail to people who would not seem to afford the payments.


Credit Card company mailing lists usually run through every type of person regardless of current financial standing. Getting one or not getting one is not a true sign of a person’s credit standing. This is usually due to faulty, lazy or erroneous information gathering as of course, credit card companies would only want to give those who are capable of paying.

Myth 2 – Bankruptcy is a surefire way to remedy credit problems should a person’s debt get very high.


Filing for bankruptcy will never assist anyone with regard to credit. It is more serious than most people think and it is not just a way out. Legally, it is a solid case and becomes placed in public record that usually has ramifications for the duration of a lifetime. It can haunt people who would need to apply for loans or jobs in the future. This is something that people cannot take back or fully expunge and those who have done it have usually regretted doing so in the first place.

Myth 3 – There is the notion that people with credit are able to buy things, services etc. easier than those who do not use it.


People seem to forget that credit is essentially debt and so requires much more trust than payment right away. Cash and hard money should still be viewed as the prime method of acquisition as there are no strings afterwards. Purchasing something outright lessens any future problems regarding that purchase. Nowadays, the power of credit is used for everything but the function of paying upfront should not be ignored. It should be noted that credit does have its main use which is assistance when truly needed.