6 Myths about credit scores
If you’re looking for a home, getting a car, or just wanting to up your credit score, then you’re acutely aware of how much influence your current credit score has on achieving your goals. However, there are several misconceptions about credit scores and just what and how they can affect your desired achievements.
Clearing up the confusion about credit scores will hopefully relieve some worries about their influence:
Myth 1: Checking your credit score lowers it. Actually, checking your score yourself is called a “soft inquiry”, and it doesn’t affect your credit score, unlike the slight effect that lenders’ and creditors’ “hard inquiries” make.
Myth 2: Close old or inactive accounts to help your score. This actually could lower your score because it shortens your credit history.
Myth 3: Paying negative records will take them off your record. True, to an extent. However, negative records such as late payments and collections typically still remain on your record for seven years.
Myth 4: You’re not responsible for accounts you cosign on. Not the case; it’s a joint account, and activity on the account will affect both partners jointly.
Myth 5: Paying phone, utility and rent bills on time increases your credit score. While not paying these bills on time could influence your score, paying bills on time isn’t reported to the credit agencies.
Myth 6: Your credit score reflects trends and/or changes in your payment behavior. Actually, credit reports show consumer risk at that specific moment.
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