Five Credit Myths You Should Know About

1.  It is possible to increase credit score through the cancellation of your credit card accounts.If you close your credit card accounts, then your credit score will increase.

FALLACY! Canceling your credit card contributes to the shortening of the age of your credit account, which is also one of the largest influences of your credit score. The scores on your credit report, for that reason, will not improve once you decide to close your credit accounts.

2. You can increase your credit score by paying down your installment debts.

FALLACY! Paying back installment liabilities will not increase your credit score. The factor that has implications on your credit rating is not the amount you repaid, but the particular day or time you settled the loan. Actually, consumer credit report officers are only concerned with identifying even if you paid for your financial obligation on time or not.

3. Having only one credit score is natural.

FALLACY! Actually, you can receive up to three credit scores. Each of the three major consumer credit reporting agencies in the US has its own way of computing your credit rating. The computations prepared by the three agencies translate to three credit scores with very little dissimilarities. The three credit scores are acknowledged by the Fair Isaac Corporation, which is the company accountable for the calculation of your FICO scores.

4. You can never remove a negative entry in your credit report until the seven-year requirement is up.

FALLACY! A bad mark, whether it is a late payment item or an existing loan entry, can be eliminated from your credit report. You can do this by requesting a goodwill adjustment from your loaners or by disputing the inaccuracy of your credit report.

5. Holding your credit balance helps increase your credit score.

FALLACY! It is actually the opposite. It is totally fine to maintain credit card activity; however, it has no effect on your account balance. Maintaining a particularly low balance or no balance at all is really one of the best ways to keep a considerable credit rating and improve it.


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