Online banking system Credit Karma shares five myths to consumers about credit scores. In a world where more than 94 percent of American consumers owned a credit card in 2009, according to a Federal Reserve Bank study, developing a good credit score has never been more important.
Checking credit drops the score
False. Only when a lender or creditor makes inquiries can it be dropped a few points. These are referred to as “hard inquiries.”
Closing old accounts is good
Closing old and inactive accounts, rather than managing credit, can lower a credit score because it can make the credit history appear shorter. In order to lower available risk, ask for lower credit limits or close new accounts instead of old.
Negative records are removed from your credit report once it is paid off
Bankruptcies, late payments, and collection accounts — all negative records — will stay on the report for 7 to 10 years.
Co-signing doesn't make you responsible for the account
While trying to help a friend out, if they don't make the payment it will negatively affect the co-signer. Any joint account is taking legal responsibility for the account — which means all positive or negative activity — and will show on both credit scores.
Paying off debt adds 50 points to the credit score
Because of the way scores are calculated, credit scores and how they are affected is difficult to predict. Paying bills on time, reducing debt and removing inaccuracies from the credit report is the best that can be done.
- Financial interventions don't work
- Stericycle critics: Shut it down now
- PepsiCo latest sponsor to voice NFL concern
- Yellen says US families need to boost savings
- University of Utah entrepreneurship program...
- Where’s the app for an earthquake warning?
- Cities to celebrate completion of S-Line...
- FedEx to add 50,000 seasonal jobs
- Financial interventions don't work 7
- Yellen says US families need to boost... 6
- Salt Lake City is now 'Ski City USA' in... 5
- Extended warranties a big sell. Are... 4
- Dave Ramsey says: Tips for stretching... 4
- PepsiCo latest sponsor to voice NFL... 3
- FedEx to add 50,000 seasonal jobs 2
- Where’s the app for an earthquake... 2