Source: https://files.consumerfinance.gov/
Today, there’s more information on your credit score and improving it than ever before, but unfortunately, there are still many customers who believe inaccurate and even harmful information about their credit score. We’ve put together some of the most common credit score myths and the truth about each of them.
#1. A Bad Credit Score Lasts Forever
When your credit score is low, it can be all too easy to feel like it’s going to stay that way forever – but that couldn’t be further from the truth. Your credit score will only stay low if you don’t stop making financial choices that hurt it. But if you’re taking steps to get on top of your finances, pay debts on time, and close accounts, then you’ll begin to see it improving.
#2. It Takes a While to Hurt Your Credit Score
Source: https://files.consumerfinance.gov/
Many people mistakenly believe that you’ll need to make sustained bad financial decisions consistently and over a long period of time to harm your credit score. But the truth is that it can be relatively easy to drag your credit score down if you are not careful. And, it only takes a few months to ruin your credit score if you have a payment that’s overdue or even if you’ve borrowed too much money in that period of time.
#3. Borrowing Hurts Your Credit Score
Another common credit score misconception is that borrowing will harm your credit score. But actually, borrowing money, as long as you are able to responsibly manage and repay it, can have the opposite effect. The fact that lenders find you trustworthy enough to provide you with credit will give your credit score a boost, and it gives you a chance to show future creditors that you are responsible with money. If you’re trying to rebuild your credit rating, borrowing bad credit payday loans from a site like Readies, when paid back on time and in full, can be a good way to start rebuilding and opening up your options to other types of credit again.
#4. Checking Your Credit Hurts Your Score
Source: https://www.kiplinger.com/
Contrary to popular belief, checking your credit rating will not hurt your score. In fact, it’s encouraged, as regularly checking your credit report allows you to determine what you need to do going forward in order to improve it. You can check your credit report as many times as you like, as long as you are using a credit scoring service rather than a lender to do so.
#5. Closing a Credit Card Will Improve Your Score
Finally, if you have a credit card that you’ve paid the balance of in full and don’t intend to use in the future, closing it could do more damage to your credit score than you realise. In fact, it’s best to keep it open if it’s in good standing – this shows lenders that whilst you’ve got the credit there to use, you don’t actually need it.
When it comes to improving your credit score, don’t let these common myths get in the way!
