8 Credit Scores Myths

Chayo discusses the details on how to rebuild your credit. Everyone has fallen on hard times when trying to pay their bills on time. Some people may have a bankruptcy, a divorce, or you face debt due to another person. There are many reasons for getting in trouble with your credit rating, but it’s not a complete loss. Anyone can establish a good credit report if you know the necessary steps. There are 8 myths to rebuilding credit most people are not aware. Myth 1: You should stay away from credit ― period. Those who avoid using credit are at risk of never developing a strong credit history. But in today’s credit-centric world, avoiding credit cards or other types of debt makes accomplishing other financial goals incredibly difficult. The truth is consumers should look to establish multiple lines of credit and make payments consistently to build up their credit scores Myth 2: Closing credit cards will raise your credit score. If you paid off a credit card and don’t plan on using it again, closing the account can feel like the responsible thing to do. Unfortunately, by closing it, you can inadvertently harm your credit score. Myth 3: Checking your own credit hurts your score. Certain types of credit checks can have a temporary negative effect on your credit score ― but checking your own credit is not one of them. Checking your own credit results in a “soft” inquiry, which doesn’t affect your score. For example, checking your credit resume for any changes. Myth 4: Making more money will increase your score. When you apply for a credit card or loan, the lender will often consider your income when deciding whether you’re approved. But that factor is independent of your credit score, which they’ll also consider. Myth 5: Credit reports and scores are the same things. Though it represents the same types of information, your credit report is not the same as your credit score. Think of a credit report as your financial report card and your credit score as the overall grade. Myth 6: Once delinquent accounts are paid; your slate is wiped clean. Paying off past due accounts will get the debt collectors off your back. But when it comes to your credit, the damage can last years after you’ve made good. Your credit report shows positive and negative accounts, including collection accounts, discharges, late payments and bankruptcies ― some of which can be on your report for up to 10 years. Myth 7: You can max out your cards if you pay the balance every month. Paying your bill in full every month is the key to avoiding interest and building a solid payment history. But who knew that racking up a balance midmonth could hurt you. Because the date that credit card issuers report your balance to the credit bureaus is often not the same date as your payment due date. Myth 8: You need a credit repair company to fix your bad credit. Poor credit can feel like an emergency, especially if it’s preventing you from borrowing money you need. Credit repair companies bank on that sense of urgency, literally. Although, there are a lot of shady credit repair agencies out there, the truth is that even the legitimate ones rarely do anything for you that you can’t do yourself. Rebuilding Your Credit will walk you through the steps necessary to gain the high credit score you always wanted; whether you have a lot of money or not (credit scores are not based on income). We will give you the simple steps involved, the process not impossible. It will entail effort, but you can succeed. Contact me at chayobriggs.com

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