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1. Are you hurting your credit score when you check your credit reports?
No! When you check your own credit it’s not harmed because it does not count as a “hard inquiry”
2. Is your credit score is based on things like your income, gender, and age?
This is FALSE! The factors we previously described are what credit bureaus use to create your credit score. The amount of money you bring in does not make a difference, but what does matter is how much of your income is bound by debt compared to the amount of credit you have available. Also, always remember that when you are married, any joint account activity influences both of your credit scores!
3. Does it matter how much your credit card is used if all payments are on time and they are not maxed out?
It does matter! You should never charge more than 30% of your total credit limits. If you do, your credit score is significantly impacted in a negative way.
4. Is my credit negatively impacted when I close old credit cards and accounts?
Yes! When you close those old credit card accounts, your credit score is lowered because your credit limits and credit age is reduced.
5. Does it help your credit score by using a bank account and ATM card?
No it is not! Information on your checking and savings accounts are not included on your credit report. So, your credit is not improved simply by using an ATM card with a Visa or MasterCard logo.
6. Does obtaining quotes from several different mortgage companies will hurt your credit?
As long as you do your research within a short time period, various credit inquires will only count as one inquiry on your credit report. The amount of time is debatable. There are those who say that short time period is only 14 days, while others say all inquires made within 45 days only count as one inquiry. To be safe, do as much shopping around as possible within two to three weeks to get all of the credit checking done as quickly as possible. One recent inquiry will not have a large negative impact on your total score.
7.Is a foreclosure worse than a short sale on your credit report?
No. Both short sales and foreclosures negatively impact your credit.
8. Does my credit score increase when I pay off my old debts?
This is a common belief, but surprisingly, it is not always true! Paying off old debts does not always improve your credit score because once you pay it, the debt can appear to be new on your credit report! If the amount you owed was substantial, paying can make it seem as though you’ve just taken on a lot of new debt. The credit bureaus are working on ways to eliminate to this issue, but there is still a chance that your credit score could fall because you pay your debt! One way to get around this credit-harming obstacle is to pay attention to knowing the statue of limitations for collections of all of your debt. This is an important fact because you don’t want to pay a bill when the debt is no longer enforceable by law, unless there are extraordinary circumstances.
Knowing the truth in spite of these myths are vital in avoiding unnecessary drops in your credit score. Remember to always deal with a respectable agency if you are working to improve your credit score, and to always know the facts so you know whether or not the law is working for you or against you in your credit-improving mission!
9. Is your score negatively affected by many lines of credit?
This totally depends on a number of variables that determines your financial health. For example a person who is starting fresh, building new positive credit history will have little to no proof, that they can responsibly handle multiple and large lines of credit. Therefore opening several accounts over a short period of time will start to raise red flags in creditors eyes.
If the same person had a long positive credit history, making payments on time and managing multiple lines of credit responsibly over many years, then those same lines of credit will be viewed as an asset, decreasing your debt to credit ratio and demonstrating solid financial responsibility.
10. It it best to pay my credit card bill in full every month?
Absolutely NOT!!! This is the #1 myth that affects consumers ability to increase their credit scores. By paying your credit card bill in full every month, you are not improving your credit health at all. Creditors want to see payment history that demonstrates your ability to be responsible enough to remember to pay all your bills on time. The more bills you pay over time & on time, the more they can see you have a good handle on how to be a financially responsible individual.
Secondly by paying your bill in full each month, the credit card companies make no interest off of you, which gives them no incentive to increase your credit limits, which ultimately helps increase your credit score. So to conclude never pay your bills in full, always try to carry a balance and pay it off gradually.
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