Credit Score Rumors - Don't Be Misled
Myth 1: You have One Credit Score
The truth is that you have three credit scores, one from each of the three major credit bureaus, Experian, Equifax and TransUnion, who use the same formula to calculate your number. Your score may vary between the three agencies by as much as 50 points because the information they have on you may differ and they don not share the same data between bureaus. One bureau's records may reflect a longer period of time or a lender may have shared your credit information with only one of the three bureaus. Unless the scores are extremely different, most lenders will use the middle score when they consider your application.
Myth 2: You will be Penalized for Checking Your Score
There is absolutely no negative impact on your score. In fact, you should check your score at least twice each year and more often if you are applying for credit or loans.
Myth 3: Personal Information and Income Impact Score
Your score is not based on your age, sex, or income. Although your employment status is included on the credit report, it has not affect on the score. Your net worth is not factored into your score - it is based solely on how you handle your credit and loans.
Myth 4: Shopping for a Loan Hurts Your Score
Even though it is true that too many inquiries checking your credit score can negatively affect your score, this is only the case when the appeals are scattered over a period of time. The score is set up to take into account that even though you are only looking for one loan, multiple lenders may request (make and inquiry) your credit report. For that reason, all mortgage or auto inquiries made in the 30 days prior to when you choose your loan will not affect your score. Be a smart consumer and shop around for your best deal just be aware of lapses in time between inquires so your score is not negatively impacted.
Myth 5: Closing Accounts will Boost Score
Although too many credit accounts may have a negative affect on your credit score, canceling them may even make it worse. The percentage of credit that is available to you is compared against the amount that you borrow. When you close an account, the amount of available credit decreases which results in a higher ratio of debt to available credit and can hurt your credit score. Also, the longer you maintain a credit account the more valuable it is to your credit score. If you must close an account, choose a more recent account.
Myth 6: Credit Counseling Hurts Your Credit Score
The way your score is calculated ignores any reference to credit counseling that may be in your file. It was found that people who get credit counseling don not default on their debts any more often than those who have not sought counseling.
Myth 7: Your Credit Score can be repaired by Paying off Your Debts
Your credit score is based on your past behavior not your current debt. Of course, paying down your debts will help offset a bad history but it will not undo the damage already done. Patience and responsible behavior are the two elements that will help improve your credit score.
Myth 8: Quick Fixes Offered by Companies
One of the cruelest myths that many people fall for when repairing a credit score is the quick-fix offers by credit repair companies. There is simply no quick fix for a bad credit score. Your score can only be improved by managing your debt responsibly.
The truth is that you have three credit scores, one from each of the three major credit bureaus, Experian, Equifax and TransUnion, who use the same formula to calculate your number. Your score may vary between the three agencies by as much as 50 points because the information they have on you may differ and they don not share the same data between bureaus. One bureau's records may reflect a longer period of time or a lender may have shared your credit information with only one of the three bureaus. Unless the scores are extremely different, most lenders will use the middle score when they consider your application.
Myth 2: You will be Penalized for Checking Your Score
There is absolutely no negative impact on your score. In fact, you should check your score at least twice each year and more often if you are applying for credit or loans.
Myth 3: Personal Information and Income Impact Score
Your score is not based on your age, sex, or income. Although your employment status is included on the credit report, it has not affect on the score. Your net worth is not factored into your score - it is based solely on how you handle your credit and loans.
Myth 4: Shopping for a Loan Hurts Your Score
Even though it is true that too many inquiries checking your credit score can negatively affect your score, this is only the case when the appeals are scattered over a period of time. The score is set up to take into account that even though you are only looking for one loan, multiple lenders may request (make and inquiry) your credit report. For that reason, all mortgage or auto inquiries made in the 30 days prior to when you choose your loan will not affect your score. Be a smart consumer and shop around for your best deal just be aware of lapses in time between inquires so your score is not negatively impacted.
Myth 5: Closing Accounts will Boost Score
Although too many credit accounts may have a negative affect on your credit score, canceling them may even make it worse. The percentage of credit that is available to you is compared against the amount that you borrow. When you close an account, the amount of available credit decreases which results in a higher ratio of debt to available credit and can hurt your credit score. Also, the longer you maintain a credit account the more valuable it is to your credit score. If you must close an account, choose a more recent account.
Myth 6: Credit Counseling Hurts Your Credit Score
The way your score is calculated ignores any reference to credit counseling that may be in your file. It was found that people who get credit counseling don not default on their debts any more often than those who have not sought counseling.
Myth 7: Your Credit Score can be repaired by Paying off Your Debts
Your credit score is based on your past behavior not your current debt. Of course, paying down your debts will help offset a bad history but it will not undo the damage already done. Patience and responsible behavior are the two elements that will help improve your credit score.
Myth 8: Quick Fixes Offered by Companies
One of the cruelest myths that many people fall for when repairing a credit score is the quick-fix offers by credit repair companies. There is simply no quick fix for a bad credit score. Your score can only be improved by managing your debt responsibly.
Myth 1: You have One Credit Score
The truth is that you have three credit scores, one from each of the three major credit bureaus, Experian, Equifax and TransUnion, who use the same formula to calculate your number. Your score may vary between the three agencies by as much as 50 points because the information they have on you may differ and they don not share the same data between bureaus. One bureau's records may reflect a longer period of time or a lender may have shared your credit information with only one of the three bureaus. Unless the scores are extremely different, most lenders will use the middle score when they consider your application.
Myth 2: You will be Penalized for Checking Your Score
There is absolutely no negative impact on your score. In fact, you should check your score at least twice each year and more often if you are applying for credit or loans.
Myth 3: Personal Information and Income Impact Score
Your score is not based on your age, sex, or income. Although your employment status is included on the credit report, it has not affect on the score. Your net worth is not factored into your score - it is based solely on how you handle your credit and loans.
Myth 4: Shopping for a Loan Hurts Your Score
Even though it is true that too many inquiries checking your credit score can negatively affect your score, this is only the case when the appeals are scattered over a period of time. The score is set up to take into account that even though you are only looking for one loan, multiple lenders may request (make and inquiry) your credit report. For that reason, all mortgage or auto inquiries made in the 30 days prior to when you choose your loan will not affect your score. Be a smart consumer and shop around for your best deal just be aware of lapses in time between inquires so your score is not negatively impacted.
Myth 5: Closing Accounts will Boost Score
Although too many credit accounts may have a negative affect on your credit score, canceling them may even make it worse. The percentage of credit that is available to you is compared against the amount that you borrow. When you close an account, the amount of available credit decreases which results in a higher ratio of debt to available credit and can hurt your credit score. Also, the longer you maintain a credit account the more valuable it is to your credit score. If you must close an account, choose a more recent account.
Myth 6: Credit Counseling Hurts Your Credit Score
The way your score is calculated ignores any reference to credit counseling that may be in your file. It was found that people who get credit counseling don not default on their debts any more often than those who have not sought counseling.
Myth 7: Your Credit Score can be repaired by Paying off Your Debts
Your credit score is based on your past behavior not your current debt. Of course, paying down your debts will help offset a bad history but it will not undo the damage already done. Patience and responsible behavior are the two elements that will help improve your credit score.
Myth 8: Quick Fixes Offered by Companies
One of the cruelest myths that many people fall for when repairing a credit score is the quick-fix offers by credit repair companies. There is simply no quick fix for a bad credit score. Your score can only be improved by managing your debt responsibly.
The truth is that you have three credit scores, one from each of the three major credit bureaus, Experian, Equifax and TransUnion, who use the same formula to calculate your number. Your score may vary between the three agencies by as much as 50 points because the information they have on you may differ and they don not share the same data between bureaus. One bureau's records may reflect a longer period of time or a lender may have shared your credit information with only one of the three bureaus. Unless the scores are extremely different, most lenders will use the middle score when they consider your application.
Myth 2: You will be Penalized for Checking Your Score
There is absolutely no negative impact on your score. In fact, you should check your score at least twice each year and more often if you are applying for credit or loans.
Myth 3: Personal Information and Income Impact Score
Your score is not based on your age, sex, or income. Although your employment status is included on the credit report, it has not affect on the score. Your net worth is not factored into your score - it is based solely on how you handle your credit and loans.
Myth 4: Shopping for a Loan Hurts Your Score
Even though it is true that too many inquiries checking your credit score can negatively affect your score, this is only the case when the appeals are scattered over a period of time. The score is set up to take into account that even though you are only looking for one loan, multiple lenders may request (make and inquiry) your credit report. For that reason, all mortgage or auto inquiries made in the 30 days prior to when you choose your loan will not affect your score. Be a smart consumer and shop around for your best deal just be aware of lapses in time between inquires so your score is not negatively impacted.
Myth 5: Closing Accounts will Boost Score
Although too many credit accounts may have a negative affect on your credit score, canceling them may even make it worse. The percentage of credit that is available to you is compared against the amount that you borrow. When you close an account, the amount of available credit decreases which results in a higher ratio of debt to available credit and can hurt your credit score. Also, the longer you maintain a credit account the more valuable it is to your credit score. If you must close an account, choose a more recent account.
Myth 6: Credit Counseling Hurts Your Credit Score
The way your score is calculated ignores any reference to credit counseling that may be in your file. It was found that people who get credit counseling don not default on their debts any more often than those who have not sought counseling.
Myth 7: Your Credit Score can be repaired by Paying off Your Debts
Your credit score is based on your past behavior not your current debt. Of course, paying down your debts will help offset a bad history but it will not undo the damage already done. Patience and responsible behavior are the two elements that will help improve your credit score.
Myth 8: Quick Fixes Offered by Companies
One of the cruelest myths that many people fall for when repairing a credit score is the quick-fix offers by credit repair companies. There is simply no quick fix for a bad credit score. Your score can only be improved by managing your debt responsibly.
posted by zzzzzzzzzzz at
2:06 AM
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