News & Updates

6 Credit Score Myths Debunked

Myth: Closing unused card accounts is good for your credit.

Fact: The average age of your accounts is a significant part of your score; keeping your oldest cards open (even if you don’t use them often) generally will help your score.

 

Myth: Paying your utility or cell phone bills on time builds your score.

Fact: Not really. On the other hand, if you are late or delinquent that will hurt you.

 

Myth: Holding a credit-card balance is good for your credit.

Fact: Generally it’s better to pay your credit card bill in full and on-time every month. (Plus, that way, you avoid interest charges.)

 

Myth: There is only one credit score. (Nearly 29 percent thought so.)

Fact: There are multiple credit-scoring models used by multiple credit-scoring companies. Your score can even change depending on the type of loan you are seeking.

 

Myth: While more than half of consumers know that checking your credit report will not reduce your credit score, 27 percent said it will.

Fact: A so-called hard inquiry for credit-card applications or credit checks for loans can cause a temporary dip in your score. Soft inquiries such as reviewing your credit score through credit-monitoring tools will not impact your score. (Surprise! Frequent credit score checks improve it.)

 

Source: CNBC