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10 Credit MythsAre They Lowering Your     Credit Score?                         1
Myth 1: Checking Your Credit  Checking Your Credit Report Hurts Your Credit Score    •   No! No! No!    •   As a consumer ...
Myth 2: Closing Credit Cards    Closing Old Credit Cards Will Improve My Score    •   No. In fact, in most cases it will h...
Myth 3: More Money  The More Money You Make the Better Your Credit   •   No, because credit bureaus don’t know what you ma...
Myth 4: Not Using Credit        Not Using Credit Will Help My Credit Score    •   Credit is funny. You can’t use it too mu...
Myth 5: Credit Scores  All Your Credit Reports and Scores Will be the Same    •   Not necessarily    •   Credit bureaus ma...
Myth 6: Bad Credit is Forever               Bad Credit Will Haunt You Forever    •   Bad credit NOT forever    •   Credit ...
Myth 7: Credit Reports         All Credit Reports are Perfectly Accurate   •   They are getting better…   •   A well refer...
Myth 8: Paying Past Due Debt       Paying Past Due Accounts Erases Bad Credit   •   Unfortunately, it doesn’t work like th...
Myth 9: Balance Transfers Moving Credit Card Balance Transfers Hide Problems    •   Credit scoring models consider ALL of ...
Myth 10: Debit/Check Cards   Debit and Prepaid Check Cards Help Your Credit    •   This is a very confusing myth. These ca...
How is Your Credit Doing?   Regularly review of your credit report and score   • Check for mistakes and inaccuracies   • P...
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10 Credit Report and Score Myths - Quizzle.com

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Get the skinny on 10 credit myths that might be hurting your credit score.

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10 Credit Report and Score Myths - Quizzle.com

  1. 1. 10 Credit MythsAre They Lowering Your Credit Score? 1
  2. 2. 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 2
  3. 3. 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. 3
  4. 4. 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 4
  5. 5. 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. 5
  6. 6. 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. 6
  7. 7. 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. 7
  8. 8. 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. 8
  9. 9. 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. 9
  10. 10. 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. 10
  11. 11. 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. 11
  12. 12. 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 12

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