5 Credit Myths You Need to Know Aren’t True

5 Credit Myths You Need to Know Aren’t True

5 Credit Myths You Need to Know Aren’t True

MYTH 1: You only have one credit score.
This is without a doubt the most common credit myth. There is no one true credit score. Credit industries use an array of models and factors to generate consumer credit scores, but there are 3 credit scores each are modeled from one of the 3 credit bureaus Experian, Transunion, & Equifax.

MYTH 2: Checking your credit report will hurt your credit score.
Checking your own credit score will never negatively affect your credit score. As a consumer you are entitled to one free copy of your credit report every 12 months from each of the three nationwide credit reporting agencies.

MYTH 3: Bankruptcy will wipe your credit history clean.
While bankruptcy may help erase certain past debts those accounts will not disappear from your credit report and can remain on your credit report for 10 years. Federal student loans cannot be discharged in bankruptcy therefore they will remain on your credit report.

MYTH 4: Employers do not check credit when hiring & having bad credit wont cost you a job.
This couldn’t be further from the truth. In today’s competitive job market employers want to know who they are hiring and are checking potential candidates’ credit reports more than ever.
So yes having bad credit can cost you that new job.

Myth 5: You do not need good credit when looking for a new place to live if you’re just looking to rent not own.
Again this is completely wrong in today’s world landlords want to know who they are renting to and your ability to pay rent on time & the best way to determine that is by checking your credit.

So these are the top 5 credit myths & knowing them along with your credit score is the first step to getting your credit on track.

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Do-It-Yourself Credit Repair for Beginners

Do-It-Yourself Credit Repair for Beginners

Do – It – Yourself Credit Repair for Beginners

Know your CREDIT SCORE
Get a copy of your most recent credit report from all 3 credit bureaus

Carefully determine the accuracy of your credit report
Verify name, address, social security number and ALL listed items

Look for errors on all your credit accounts Determine which dispute letters are necessary

Be responsible going forward
Pay bills on time from this moment on
If you can not pay balances in full ALWAYS PAY THE MINIMUM
Set up AUTO PAY for recurring payments (including loans and credit card payments)

Pay down credit card balances
As you can try doubling up on minimum monthly payments or even taking a percentage of your weekly/biweekly paycheck to allocate for your credit card balance

Do not apply for new credit
Using a credit monitoring website or app you can regularly check your credit score
Wait at least 3-6 months and when you see a difference in your score to apply for new credit

Credit Score 101

Credit Score 101

The Anatomy of a Credit Score

FICO Credit Scores are determined by the following:

Payment history (35%)

This is the most important piece of your credit score. Any negative payment history will have a significant reflection on your score. Paying your bills on time is crucial to your credit score.

Current loans and amount owed on credit cards (30%)

Your balance to limit ratio is the second most important factor that determines your credit score. It is important to keep your balance no more than 30% of your credit limit.

Length of credit history (15%)

The longer you have accounts in good standing the more positive that will be for your credit score. Creditors want to see a history of credit responsibility.

New credit and inquiries (10%)

Opening several new credit accounts within a relatively short amount of time will negatively impact your credit score. Having a large amount of hard inquiries could lower your score.

Type of credit account types (10%)

It is imperative to have a mixed amount of credit accounts. This includes revolving credit such as credit cards; installment credit such as student or auto loans; and open credit such as charge cards that require the balance to be paid in full each month.