Five Credit Myths You Should Know About

1.  Credit ratings are improved if you closed your credit card accounts.

FALLACY! Canceling your credit card account adds up to the shortening of the age of your credit account, which is one of the primary clinchers your credit score. Your credit rating, therefore, will not increase once you opt to close your credit card accounts.

2. Credit scores are increased once you repay your installment loans.

FALLACY! Paying off installment debts will never improve your credit score. The detail with influences on your credit score is not the amount of money you paid for the loan, but the exact date you settled the loan. In fact, consumer credit report agents are only interested in identifying if you took care of your balance according to schedule or not.

3. Having only one credit score is natural.

FALLACY! Actually, you can receive up to three credit scores. Each of the top three credit report agencies in the country has its unique means of preparing your credit score. The data formulated by the three organizations result to three credit scores with minute dissimilarities. All three credit scores are acknowledged by the FICO, which is the company accountable for the calculation of your FICO credit scores.

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

FALLACY! A bad marking, whether it is a late payment item or an existing loan item, can be removed from your credit report. You can initiate this by asking for a goodwill adjustment from your loaners or by testifying against the imprecision of your credit details.

5. Holding your credit balance helps increase your credit score.

FALLACY! It is actually the opposite. It is absolutely fine to have credit card activity; however, it doesn't affect your credit card balance. Keeping a remarkably low balance or no balance at all is really one of the most effective ways to prolong a good credit score and improve it.


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