20 Aug Beware of Credit Score Myths
Credit Score Myths
Credit scores and credit scoring systems are complex and at times hard to understand. As a result there’s a lot of misinformation that floats around the public sphere and as with anything this can sometimes lead to widespread rumors that just simply aren’t true.
Don’t let fear and fantasies rule your finances; your credit score isn’t mysterious. Let’s bust a few of the most common myths regarding credit scores.
Don’t take it to the max
Even if you can pay it all back in one month, don’t max out your cards all at once. It’s best not to use more than 30% of your available credit at any given time.
If you really are that financially solvent, consider asking your lender to raise the credit limit on your account.
Nothing really matters, almost
Your income, address, job, age, and other demographics don’t affect your credit score. They may affect the cost of your insurance, but they don’t factor into your credit.
What matters is if you’re paying your bills on time.
Pay no attention to the man behind the curtain
We can’t guarantee you’re not on someone’s watch list somewhere. We can guarantee, however, that there is no credit blacklist circulating among credit bureaus and lenders. If you feel that banks hurry to lock their doors before you ask for more money, you probably need to clean up your credit history and raise your credit score. Then those doors will open for you.
Closing bad accounts won’t make them disappear
Account information stays on your credit history for 7 to 10 years. Closing a line of credit that reported negative information about you won’t make it go away.
If you must close accounts, take it slow. Close one and see how it affects your credit score. Spread out closures over the course of a year.
Disputing errors can positively impact your credit score.
Burning down the house
If you try to avoid foreclosure by doing a short sale (accepting an offer for less money than is left to pay the mortgage), it will damage your credit score. The lender will accept it and write off the loss. Darned if you do…
Hard or soft?
If your landlord or lender checks your credit, it’s considered a hard inquiry. You have to give them permission to check it. Avoid having several of those done at once – it looks bad. It signals that you are actively looking for multiple lines of credit, indicating that you may be predicting an upcoming financial hardship so you are trying to obtain as much credit as quickly as possible before a foreclosure or similar hits your report.
If you check your own credit, that’s a soft inquiry. You can check your credit score every single day and it won’t hurt the numbers. In fact, being aware of your score can help you stay on track financially.
Go ahead, make your day
Call Honore’ Credit Consultants today so we can discuss options for helping to improve your credit profile! (844) 967-3724