Five Credit Myths You Should Know About

1.  Credit ratings are improved if you closed your credit card accounts.

NOT TRUE! Canceling your credit card influences the cutting down of your credit account age, which is also one of the largest clinchers your credit score. Your credit rating, as a result, will not improve if you do choose to cancel your credit card accounts.

2. You can improve your credit rating by settling your installment loans.

NOT TRUE! Paying down installment loans will never increase your credit score. The factor with effects on your credit rating is not the amount of money you paid for the debt, but the date you repaid the loan. Actually, credit report officers are only concerned with identifying if you settled your financial responsibility before the deadline or not.

3. Having only one credit score is natural.

NOT TRUE! The truth is, you can have as many as three credit scores. Each of the three major credit report agencies in the US has its own process of calculating your credit rating. The figures prepared by the three companies result to three credit scores with slight dissimilarities. The three credit scores are recognized by the Fair Isaac Corporation (FICO), which is the institution accountable for the calculation of your FICO credit scores.

4. It is impossible to remove a bad marking from your credit report.

NOT TRUE! A poor entry, whether it is a late payment record or an existing liability account, can be deleted from your credit account. You can start this by requesting a goodwill adjustment from your loaners or by disputing the inexactness of your credit report.

5. Credit scores are increased if you hold your credit account balance.

NOT TRUE! It is actually the opposite. It is perfectly all right to have credit card activity; however, it has no effect on your account balance. Keeping a substantially low balance or no balance at all is indeed one of the most effective means to preserve a good credit rating and improve it.



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