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10 Credit MythsAre They Lowering Your

Credit Score?

Myth 1: Checking Your Credit

Checking Your Credit Report Hurts Your Credit Score• No! No! No!• As a consumer you can check your credit report anytime you want• It’s your fundamental right, protected by the Fair Credit Reporting Act• You can get a free credit report once a year at AnnualCreditReport.com• Your credit report is used by everyone from lenders to employers• Make sure everything is accurate!

Get a Free Credit Report and Score every 6 months from Quizzle.com

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Myth 2: Closing Credit Cards

Closing Old Credit Cards Will Improve My Score• No. In fact, in most cases it will hurt your score• Closing credit cards reduces your available credit• If you have balances, your credit utilization will increase• High credit utilization can really pull down your credit score• In addition, you could be closing a good credit example

Check your credit report regularly to make sure all of your accounts are reported accurately.

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Myth 3: More Money

The More Money You Make the Better Your Credit• No, because credit bureaus don’t know what you make• Credit bureaus only report what creditors report• Your credit report and score is about paying your bills• How you pay them is a mystery to the credit bureaus

Your credit report is a great way to track how much of your available credit you’re using

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Myth 4: Not Using Credit

Not Using Credit Will Help My Credit Score• Credit is funny. You can’t use it too much or too little• Not using credit can actually make your credit score disappear• Lenders want examples of you using credit and paying it back• Credit scores need credit data to generate your score

Regularly check your credit report and score to make sure your good credit behavior is rewarded.

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Myth 5: Credit Scores

All Your Credit Reports and Scores Will be the Same• Not necessarily• Credit bureaus may not all have the same data• Credit reporting is voluntary. Creditors may not report to all bureaus• The timing of reporting and scoring may cause variances• Credit scores often use slightly different algorithms

Review your credit report to ensuring it is the most accurate representation of your credit.

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Myth 6: Bad Credit is Forever

Bad Credit Will Haunt You Forever• Bad credit NOT forever• Credit activities are reported for seven years• However, older credit activity has less weight than newer activity• Consistency is key. Start a recent trend of good credit behavior

If you’re working on improving your credit, check on how creditors report on your every month.

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Myth 7: Credit Reports

All Credit Reports are Perfectly Accurate• They are getting better…• A well referenced 2004 survey found 80% of credit reports had errors• A more recent study shows that has dropped to just over 19%• Even better news…only about 1% of those errors hurt credit scores• However, that 1% usually caused a 20 point (negative) difference

Are you the 1%? That could be the difference between good and bad credit.

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Myth 8: Paying Past Due Debt

Paying Past Due Accounts Erases Bad Credit• Unfortunately, it doesn’t work like that• Credit reporting remains on your credit report for seven years• Bankruptcies typically stay longer, up to 10 years• The important thing is that a “paid collection,” “releases tax lien,” or

“satisfied judgment” is better than the alternative

Do you have past due accounts holding back your good credit? Get a plan and start rebuilding.

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Myth 9: Balance Transfers

Moving Credit Card Balance Transfers Hide Problems• Credit scoring models consider ALL of your credit card balances• Credit scores typically evaluate your total “revolving debt”• Moving balances around doesn’t change that total debt picture• Focus on strategies that help you pay off debt faster

Get a better understanding of your complete debt picture with regular checks of your credit report.

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Myth 10: Debit/Check Cards

Debit and Prepaid Check Cards Help Your Credit• This is a very confusing myth. These cards are not extension of credit• These cards are simply convenient ways to access your own cash• Since you’re not using credit it isn’t reported to credit bureaus• They might help build better habits, but they won’t help your credit

Credit reports and scores are designed to help lenders decide if you’re a good credit risk.

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How is Your Credit Doing?

Regularly review of your credit report and score• Check for mistakes and inaccuracies• Protect yourself from identity fraud• Look for opportunities to improve

Get a Free Credit Report and Score every 6 months from Quizzle.com

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