There are a lot of information on credit reports and debt management on the Internet, there are also a lot of misinformation circulating there. Here are 10 myths about credit and debt management, and the cold facts.
Myth 1: Paying a debt removed from your credit report.
Late payments, accounts, tax privileges and collections usually stay on your credit report for seven years from the date of delinquency, even though it has since been paid. Having an account on your credit report can significantly reduce your credit score, however, the most remote, it is - the furthest in the past - the less likely it is to have a great impact as the debt is reported as paid .
A negative unpaid account continue to reduce your overall credit score.
Myth 2: The cancellation of your credit cards will improve your credit score.
This is not true. Approximately 15% of your credit score is based on the length of time you've had credit reported. If you close a card that you had for a long time, leaving only new cards open, you have had the effect of shortening your credit history. 30% of your credit score is based on the amount that you should regard your total credit lines to keeping open a card that has a zero balance can help you make your total credit available high in proportion to the balance that you carry, which can help increase your score. Of course, the combination of accounts is taken into account, too, in too many cards is not desirable.
Myth 3: Your credit score is the same for all three credit bureaus.
Each of the three major credit bureaus, Equifax, Experian and Trans Union, generate their own assessments based on information that is reported. If a particular creditor, only reports to Experian, your client to Equifax and TransUnion take only creditor of information into account when calculating your score, resulting in another score.
Myth 4: regularly check your credit report will decrease your score.
Your credit score is not affected by the demands that are made for commercial purposes, or which are initiated by you in order to verify the accuracy of your credit report. In addition, while the demand for placing on the market are reported on your credit report, your request for a copy of your report is not shown, it is not reported to your creditors.
Myth 5: The shop around for a loan can damage your credit score.
Rate of purchase should not affect this factor because the investigation will be made for a particular type of credit for a short period of time. If the same types of investigations are made within 14 days of each other, they rely only on a survey of your credit report, although it only applies to loans, not the card applications credit.
Myth 6: cash payment will increase your credit score.
The cash payment is a great way to stay out of debt, but it can hurt your overall credit score. Your score is determined by your credit history, which means having the assistance and credit payment in cash for all, unless you use to pay your bills by credit card in full each month, it will not appear on your credit report or help you to establish a positive credit history.
Myth 7: The marriage of someone who has bad credit hurt your credit score.
Although marriage usually means that you'll be combining finances, your credit reports will not be met. If you open a joint account, credit information will appear on both reports, but your (or your spouse) past negative credit history will not be reflected on the other person credit unless you add one to your spouse account which has a negative history.
Myth 8: Co-signature credit does not make you responsible for the loan.
Many parents make this mistake when they help their children buy a car. If the first loan recipient is unable to pay, the co-signer is responsible for making loan payments. Period. It does not matter who is in possession of the car (or other guarantees), the creditor will come looking for the person who is the most solvable.
Myth 9: The negotiation of a settlement on a debt not bad my credit score.
If it helps to have a debt marked "paid", you'll need to remember that if you pay the total amount of debt, the creditor is entitled to report the debt "charged off" or "paid a negotiated amount ". You can ask the creditor to report the item as "paid as agreed" when you negotiate a settlement of account; sure to get in writing that if.
Myth 10: Making a late payment will not affect my other credit accounts.
It should not, however, the universal default clause that is included in most agreements credit card allows a creditor to raise your interest rate if you make late payments on other credit accounts .
Myth 1: Paying a debt removed from your credit report.
Late payments, accounts, tax privileges and collections usually stay on your credit report for seven years from the date of delinquency, even though it has since been paid. Having an account on your credit report can significantly reduce your credit score, however, the most remote, it is - the furthest in the past - the less likely it is to have a great impact as the debt is reported as paid .
A negative unpaid account continue to reduce your overall credit score.
Myth 2: The cancellation of your credit cards will improve your credit score.
This is not true. Approximately 15% of your credit score is based on the length of time you've had credit reported. If you close a card that you had for a long time, leaving only new cards open, you have had the effect of shortening your credit history. 30% of your credit score is based on the amount that you should regard your total credit lines to keeping open a card that has a zero balance can help you make your total credit available high in proportion to the balance that you carry, which can help increase your score. Of course, the combination of accounts is taken into account, too, in too many cards is not desirable.
Myth 3: Your credit score is the same for all three credit bureaus.
Each of the three major credit bureaus, Equifax, Experian and Trans Union, generate their own assessments based on information that is reported. If a particular creditor, only reports to Experian, your client to Equifax and TransUnion take only creditor of information into account when calculating your score, resulting in another score.
Myth 4: regularly check your credit report will decrease your score.
Your credit score is not affected by the demands that are made for commercial purposes, or which are initiated by you in order to verify the accuracy of your credit report. In addition, while the demand for placing on the market are reported on your credit report, your request for a copy of your report is not shown, it is not reported to your creditors.
Myth 5: The shop around for a loan can damage your credit score.
Rate of purchase should not affect this factor because the investigation will be made for a particular type of credit for a short period of time. If the same types of investigations are made within 14 days of each other, they rely only on a survey of your credit report, although it only applies to loans, not the card applications credit.
Myth 6: cash payment will increase your credit score.
The cash payment is a great way to stay out of debt, but it can hurt your overall credit score. Your score is determined by your credit history, which means having the assistance and credit payment in cash for all, unless you use to pay your bills by credit card in full each month, it will not appear on your credit report or help you to establish a positive credit history.
Myth 7: The marriage of someone who has bad credit hurt your credit score.
Although marriage usually means that you'll be combining finances, your credit reports will not be met. If you open a joint account, credit information will appear on both reports, but your (or your spouse) past negative credit history will not be reflected on the other person credit unless you add one to your spouse account which has a negative history.
Myth 8: Co-signature credit does not make you responsible for the loan.
Many parents make this mistake when they help their children buy a car. If the first loan recipient is unable to pay, the co-signer is responsible for making loan payments. Period. It does not matter who is in possession of the car (or other guarantees), the creditor will come looking for the person who is the most solvable.
Myth 9: The negotiation of a settlement on a debt not bad my credit score.
If it helps to have a debt marked "paid", you'll need to remember that if you pay the total amount of debt, the creditor is entitled to report the debt "charged off" or "paid a negotiated amount ". You can ask the creditor to report the item as "paid as agreed" when you negotiate a settlement of account; sure to get in writing that if.
Myth 10: Making a late payment will not affect my other credit accounts.
It should not, however, the universal default clause that is included in most agreements credit card allows a creditor to raise your interest rate if you make late payments on other credit accounts .
