Common Credit Score Myths

Posted by Admin on March 3, 2010
Filed under Credit repair | Comments (12)

First and foremost myth related to credit score improvement is ‘If I have a credit card I no longer use, I should close it.’ 

Reason why I call it a wrong notion is since you already have a credit card open for some time now; it would have been taken into consideration by the credit score FICO algorithm. Since Length of credit history is one important component of your credit score rating , it would have given you an overall higher rating as you have a very high utilisation for some time now nor are you maxing out the credit limit. 

Second credit score myth is ‘I have a negative of 500 $ on a credit card, and it is been there for almost 5 years, should I pay and close it’ 

Since you are thinking of paying for deletion you should have the negative deleted from your credit score report. But DO NOT CLOSE YOUR ACCOUNT. Reason is once you close your account after paying; the history would no longer be that beneficial to you for a higher credit score as much as if it were open. 

Third credit score myth is if you want to increase your credit score, you should open a new account. This is the worst affecting myth. Your current credit behaviour is most observed in your credit score. Your current enquiries for new credit card will be prominent in all these credit reports. So if your strategy was to open a new credit line thereby increasing the credit limit and improving your credit score, the harm caused by recent enquiry would be much more than any nominal benefit you could have got by this activity. 

Fourth myth of credit score improvement is you can put your name on the credit card of an unrelated person as Authorised user, whereby you don’t access his card but since you are mentioned as an authorised user you will benefit from any positives accrued on the credit card over last two years. Reason why I call it a myth is because you are no longer going to get benefit. This is considered as a malpractice as a lot of credit repair companies have unduly exploited it and from 2009 onwards, the FICO scores have devised ways to identify such activity. So no use having your name as authorised user on someone else’s card.  

Fifth myth is that credit score is all that you need to get good credit. No, this is not the case. You need to have the paying capacity for the amount of loan you apply for. Credit score determines that you have a good credit record but your loan capacity would be determined by your sources of income, your employment history and your declared taxable income. There have been cases when people have been rejected a loan based on the criteria that their taxable income was not up to the mark to get that huge loan. 

One thing you should avoid is using short cuts to increasing credit score. In the short run you might get some leverage but in the long run it would only affect your credit score adversely. Nothing can be more devastating than finding your used strategy and extra hours of work put to improve the credit score has been wasted.

One advise would be to talk to similar people with similar issues and a unique place would be the forums or boards where people help each other and share their success stories and ideas. Here you would also find that the common myths of negatives on your credit score  and the ongoing controversies are addressed by some key experts.

Myths related to credit score are immense. Some feel that people who are not having a credit score are the ones without any bank ready to pay them. That is not the case. Some people who do not prefer to take loans and buy on their own accounts, especially the Business community are the ones who are having no credit files.

Some feel that if there are some negatives on your credit score, the existing employer might ask you to leave. This is not the case, there haven’t be any such cases till date.

Please do not fall prey to identity theft because of some myths that you have to reveal your personal details for a particular transaction. Only banks tend to ask for certain particulars from you. Please do not reveal your passwords or credit card details to anyone else who might misues it.

Credit Repair Scams

Posted by Admin on August 14, 2009
Filed under Uncategorized | Comments (05)

Everyday there is a new credit repair company which spins off declaring it has got a quick fix to raise the score of its client and charges a hefty sum for it. Fact is no one can remove a correctly mentioned negative entry on your credit report.[…]

Read more…

Online Credit Reports

Posted by Admin on February 18, 2010
Filed under Uncategorized | Comments (12)

Accessing credit history and credit score is a common topic of discussion. Consumers have the right to access their credit report by accessing online or ordering their credit reports from the authorised bureaus. There have been number of instances where innocent people were fooled by online websites which sprung up overnight and told them that they can sell them these credit reports  […]

Read more…

ASK A QUESTION AND GET ANSWER NOW

Posted by Admin on February 18, 2010
Filed under Uncategorized | Comments (12)

Self Help Credit Repair

Posted by Admin on August 14, 2009
Filed under Uncategorized | Comments (05)

Searching around the internet for credit repair can be highly confusing. So are you frustrated about the self help credit repair? Do you think it does not work and feel little disappointed?Don’t be so disheartened since credit score improvement is not just about hiring of best lawyers in the business but it is more about persistence and self discipline. […]

Read more…

Cut Credit Cards. Bargain better Deals

Posted by Admin on February 18, 2010
Filed under Uncategorized | Comments (12)

The right question in understanding a credit score is to be able to control your credit card expenditure and bargain better rates. Checkout how to exactly do itstarting from your own emotions about the card[…]

Read more…