Five Common Myths About Credit

1.  You can improve your credit rating by closing your credit card accounts.

MYTH! Canceling your credit card account adds to the cutting down of your credit account's age, which is one of the largest influences of your credit rating. Your credit score, therefore, will not increase if you do opt to close your credit card accounts.

2. Paying back installment loans helps improve credit ratings.

MYTH! Paying back installment liabilities will not improve your credit score. The detail with effects on your credit score is not the sum of money you spent for the debt, but the time you settled the debt. Actually, credit report agents are only concerned with knowing whether you took care of your debt according to schedule or not.

3. Only one credit score is issued to you.

MYTH! In reality you can obtain a maximum of three credit ratings. Each of the top three credit reporting agencies in the country has its unique procedure of preparing your credit score. The data achieved by the three organizations translate to three credit ratings with diminutive discrepancies. All three credit ratings are acknowledged by the Fair Isaac Corporation, which is the organization accountable for the calculation of your FICO credit scores.

4. Negative entries, unless the seven-year requirement is up, are never erased from your credit report.Removing negative entries from your credit report is impossible; especially if the seven-year requirement is yet to expire.

MYTH! A negative mark, whether it is a late payment record or an existing debt account, can be erased from your credit account. You can initiate this by requesting a goodwill adjustment from your loaners or by disputing the imprecision of your credit data.

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.

MYTH! It is actually the opposite. It is perfectly all right to retain credit card activity; but it doesn't affect your account balance. Maintaining an incredibly low balance or no balance at all is really one of the best ways to preserve a good credit score and improve it.


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