Five Common Myths About Credit

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

FICTION! Closing your credit card account contributes to the shortening of your credit account's age, which is one of the primary clinchers your credit score. The credit scores on your records, as a result, will not increase even if you do decide to close your credit card accounts.

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

FICTION! Accomplishing installment loans will not increase your credit score. The information with implications on your credit score is not the amount you repaid, but the time you repaid the debt. In fact, credit report officers are only interested in finding out whether you took care of your financial obligation before the deadline or not.

3. Having only one credit score is natural.

FICTION! In reality you can receive up to three credit ratings. Each of the top three consumer credit report agencies in the country has its unique way of computing your credit score. The estimations formulated by the three organizations result to three credit ratings with minute discrepancies. All three credit ratings are recognized by the Fair Isaac Corporation (FICO), which is the company accountable for the preparation of your FICO credit scores.

4. It is impossible to remove a bad marking from your credit report.

FICTION! A negative mark, may it be a late payment entry or an existing loan item, can be erased from your credit report. You can initiate this by requesting a goodwill adjustment from your lenders or by disputing the inaccuracy of your credit report.

5. If you hold your credit card balance, then your credit score will improve.You can improve your credit by maintaining your credit card balance.

FICTION! It is actually the opposite. It is totally fine to maintain credit card activity; but it doesn't affect your credit card balance. Keeping an incredibly low balance or no balance at all is actually one of the best means to prolong a considerable credit score and improve it.


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