Five Common Myths About Credit

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.

FICTION! Closing your credit card adds to the cutting down of your credit account age, which is also one of the biggest clinchers your credit score. The credit scores on your records, for that reason, will not improve if you do choose to cancel your credit accounts.

2. Paying back installment loans helps improve credit ratings.

FICTION! Paying back installment liabilities will not increase your credit score. The detail that has influences on your credit rating is not the total amount of money you repaid, but the time you paid down the loan. In fact, credit report officers are only concerned with identifying if you settled your financial responsibility on time or not.

3. Only one credit score is issued to you.

FICTION! In reality you can have up to three credit ratings. Each of the three major credit reporting agencies in the country has its own means of preparing your credit rating. The calculations prepared by the three companies result to three credit ratings with very little dissimilarities. All three credit ratings are recognized by the Fair Isaac Corporation (FICO), which is the institution that is accountable for the calculation of your FICO scores.

4. If you get a negative marking on your credit report, then you can never remove it.

FICTION! A negative mark, whether it is a late payment item or an existing loan listing, can be removed from your credit record. You can initiate this by asking for a goodwill adjustment from your loaners or by testifying against the inaccuracy 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.

FICTION! It is actually the opposite. It is entirely all right to have credit card activity; however, it has no effect on your account balance. Maintaining a substantially low balance or no balance at all is absolutely one of the most effective means to prolong an acceptable credit rating and improve it.


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