Credit Myths and Fallacies


1. Paying my debts will instantly fix my credit


Untrue. Credit reports are histories of your payments, not just a testimony of where you are at the moment.

2. Credit counseling will destroy my credit score


Enrolling in a debt management program is not considered negative in scoring systems. Lenders will be able to see that you’ve been through credit counseling and that’s something certain lenders may not like. But most likely, they’ll never even know.
Most lenders these days will never see your actual report. Most lenders of any size use automated scoring systems instead of researching your report themselves.

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3. Canceling cards boosts my score


Most people think that multiple open accounts spell potential debt.  But, most creditors want to see a few pieces of active credit to prove you can manage responsibly.

4. Inquiries bring my score down


Awhile ago, this was true. But no more — in this millennium, credit agencies know a shopping mind-set when they see one.


5. Checking my own report harms my credit


There are two types of pulls; soft and hard pulls. Whena department store calls to inquire before issuing a line of credit, agencies consider that a hard pull. THESE count against your score. But personal requests and credit counselors? if done correctly, it’s considered a soft pull, which do not reflect negatively. Play it safe: go directly to the three bureaus.


6. Scores are “locked” in for six months

Nope. Your score changes as the data on your report changes.

7. Paying on-time means you don’t have to check your credit score

There can be a lot of activity occuring that you have no clue about. Eighty percent of all credit reports have incorrect information, from an incorrect birth date to even accounts you never applied for.

8. All credit reports are the same


No. Most creditors do report information to all major agencies – Equifax, Experian and TransUnion. Also, because they’re completely different companies, they don’t necessarily update their information at the same time.


9. Bad credit comes off in 7 years


Some of it does. If you filed Ch. 7 Bankruptcy, the window is 10 years.On the good side, accounts in bankruptcy can be removed7 years after the date of the first missed payment. Also, paying off or closing an account that had no problems, it also stays on your record for 10 years rather than seven.


10. I can always pay someone to fix my credit


You can clear up information posted to your account, like as a repossessed car that you didn’t even buy in the first place. But if your water bill was 3 months late, that’s a fact. A company that advertises to fix your credit will deliver on that promise by flooding credit agencies with dispute letters, which ask for verification of the entry. If verification cannot be provided, then yes, the listing must come off at that time. But if the creditor DOES verify it, it gets put back in your file in 30 days.

To find our how to do it yourself go see How Important is Your Credit Score