Credit Score Myths and Tips

Credit_Score_Myths_and_TipsHere are some myths that people believe about their credit score:

  1. Missed Payments on Bills or Debt Not Generally Reported to Credit Bureaus Doesn’t Affect Your Credit Score..  Anytime you don’t make a payment or are late, companies can report to the bureau that you have not paid.
  2. Managing Your Checking, Savings, and Investment Accounts Impacts Your Credit Score.  Your checking, savings, and investment accounts are not reported to the credit bureau and have no impact on it.
  3. Staying debt-free will give you a perfect credit score. If you want to build your credit you have to use a credit card or take out a loan.  It does not matter that you pay cash for everything.
  4. Once You’ve Settled a Debt It Drops Off Your Credit Report. Unfortunately items may linger on your credit report for up to 7 years.  Items involving bankruptcy can linger for up to 10 years.
  5. My credit score will be lowered if I apply for new credit cards or request a copy of my credit report.  Requesting a copy of your credit is only visible to YOU and does not affect your score. Applying for new credit doesn’t automatically mean your credit score will drop.  However, if several lenders check your credit within a short period of time, your credit score may drop. If you’re looking for new credit, limit the number of credit applications you submit to as few as possible.
  6. Lowering my credit limit won’t affect my credit score.  This one is not a misconception.  Decreasing your credit limit on credit cards can actually hurt your credit score. Your percentage of debt appears higher when your credit limit is lowered.  When lenders are viewing your credit it appears that you are spending more money than you bring in and therefore are a higher credit risk.
  7. Having a good job improves your credit score. It doesn’t matter if you won the lottery or are a millionaire.  The only thing that impacts your credit history, is whether you pay your bills on time.
  8. You can get your credit score for free.  Actually you can get a copy of your credit report once a year for free, but you have to pay to get a copy of your credit score.  If you generally keep an eye on your credit report than you won’t have to worry about your score.
Credit Score Myths and Tips
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My firm has 3 goals – be cost effective & efficient, make complicated things simple, and change the way people think about attorneys. We do this by offering flat rates with payment plans, educating our clients, and by encouraging everyone to ask us questions to better understand what we do & why we do it. I am a credit attorney and I love helping people with debt and credit legal issues.

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