6 Myths About Credit Reports

Credit education is the best tool you can have to build and maintain the credit you deserve. Your credit history can have a great impact on your daily life. Clearing up these six myths about credit reports can help you improve your credit; 

1. Paying my debt will make my credit reports great and raise my score. 

A credit report is a recorded history of your credit obligations and how you have or have not paid those debts. Paying off your debt alone will not change the possible negative payment history you may have on your credit report. 

2. Closing credit cards will boost my score. 

Closing a credit card that you don’t use may affect your credit score in a negative way. If you close a credit card you may affect your debt to credit ratio. This means when you have a credit card with an open balance available it increases the amount of credit you have available, which can positively affects your score. When you close the card, you will no longer have the open available balance to figure into your debt to credit ratio. 
3. Checking my own credit report will lower my score. 

Checking your own credit will not lower your credit score. A consumer can pull their own credit through the three major bureaus, as well as through monitoring companies and will not incur an inquiry. Remember, if a credit issuer checks your credit at your request for credit, you will have an inquiry reported on your credit report. 

4. I don’t need to check my credit report if I pay my bills on time. 

Don’t wait until you are trying to make a major purchase to review your credit. There can be mistakes, inaccuracies, misinformation and questionable on your credit reports that are negatively affecting your credit reports. Make sure you are prepared and keep your credit in shape, review your reports today. 
5. All credit reports have the same information on them. 

Wrong! There are three major credit bureaus. Equifax, Experian and Transunion. Creditors can report their information to one, two or all three of these bureaus. They are separate companies and the information they report will be specific to what a particular creditor has reported to them. 

6. Filing Bankruptcy will fix my credit reports. 

A bankruptcy will drastically affect your credit report and score. While it may be necessary in some cases, a bankruptcy will remain on your credit report for 10 years and lenders and credit issuers will see that you had debt you could not repay. 

Remember to stay informed and active in your financial life. Check your credit reports to make sure all the information reported is accurate and verifiable and 100% true and correct.