Five Credit Myths You Should Know About

1.  You can improve your credit score by canceling your credit cards.

MYTH! Canceling your credit card influences the shortening of the age of your credit account, which is one of the biggest bases of your credit score. Your credit rating, as a result, will not increase once you opt to close your credit card accounts.

2. Paying back installment loans helps improve credit ratings.

MYTH! Paying off installment liabilities will not improve your credit score. The information that has implications on your credit rating is not the sum of money you paid for the debt, but the time you paid down the debt. Actually, consumer credit report agents are only interested in identifying if you took care of your balance on time or not.

3. It is impossible to get more than one credit score.If you receive your credit reports from different agencies, then your credit scores will all look the same.You can only get one credit score.

MYTH! In reality you can get up to three credit scores. Each of the three leading credit report agencies in the country has its unique method of computing your credit rating. The data formulated by the three companies result to three credit scores with diminutive discrepancies. The three credit scores are accepted by the Fair Isaac Corporation, which is the company that is responsible for the preparation of your FICO scores.

4. If you get a negative marking on your credit report, then you can never remove it.

MYTH! A bad mark, whether it is a late payment listing or an existing liability entry, can be eliminated from your credit account. You can initiate this by requesting a goodwill adjustment from your creditors or by disputing the inexactness of your credit details.

5. Credit scores are increased if you hold your credit account balance.

MYTH! It is actually the opposite. It is perfectly all right to have credit card activity; but it has no implications on your account balance. Keeping a remarkably low balance or no balance at all is really one of the best means to prolong an acceptable credit rating and improve it.


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