We already know that a good credit report is important for everyone. That’s pretty obvious, however as we rocket toward an era of credit, they’re becoming a key to participate in online shopping and many other uses.
Given this importance to credit cards, there are many rumors and myths started by the internet about your credit report that should be cleared once and for all.
1st Myth: Checking Your Credit Report Can Hurt Your Score
This is very false. This myth is based on the fact that your credit report shows many inquiries to potential lenders, which may say that you’re having financial trouble.
The requests for credit reports DO NOT hurt your score if it is you checking your score. If lenders could see many self-inquiries, they can see that you’re responsible with your credit and you care about it. Therefore, it’s your credit monitoring that may improve your odds of getting a loan rather than diminish them.
2nd Myth: One of the Best Ways to Improve Your Credit Score is to Pay Off Your Accounts and Close Them.
Closing your account has an incredibly BAD EFFECT on your credit score. Lenders and banks care more about how much of your credit card limit you’re using and whether you owe more than you’re approved to borrow.
By closing your accounts, you’re making them really unhappy and show them that you can’t afford to keep the account up.
Simply put, if you close your account, your approved credit will be reduced, so future credit purchases will represent a higher utilization of your total approved credit.
3rd Myth: A Bad Payment History Disappears Once Accounts Are Up to Date
As much as we’d want this to be true, a bad payment history never goes away, but it can be “overlooked” if you paid your bills on time for the last couple of months.
Getting current is an amazing sign for lenders to assure them that you’re serious.
Now that we have these 3 big myths busted, go ahead and see what’s a good credit score rating or check out all of our other helpful articles!