Top 5 Credit Score Myths
If you’ve read some number of these posts, you learn the high degree of value I place on the credit score of yours as well as credit score maintenance. They’re like the permanent documents your elementary school teachers usually warned you about come to life. Suddenly, every financial choice you’ve made so far is under the microscope for creditors as well as lenders to find should you ever try for a mortgage.
But there’s an additional side to your credit score – a misunderstood side. Most people don’t offer the very first clue about precisely what goes into their credit score, through no true fault of their very own. You are able to thank the Fair Isaac Corporation for which. They are the company behind the FICO credit scores, most popular credit scoring type in the US, and like playing their cards close to the chest, which means they do not let consumers or lenders understand precisely how they calculate the score of yours.
Since FICO doesn’t let virtually anyone in on their secrets, it’s up to the lenders and consumers to try and interpret their smoke signals, and that typically leads to confusion. So, in the interest of shining some light on your credit score and clearing up several of the confusion, here are five of the top myths about your score:
1. The credit score of yours is the permanent record of yours. Like I mentioned before, many people equate the credit reports of theirs and scores to a report card for adults. And similar to a report card and the grades that are included in them, a lot of individuals just think about their scores if they actually find them. If the score of theirs is high, everything is right with the world. If the score of theirs isn’t where they thought it would be though, they generally do not feel so hot; some of them even seeing their score as a manifestation of themselves.
1.
The credit score of yours is your permanent record.
But here’s the thing: the same as your grades in school, the credit score of yours can easily, and usually will, change. There isn’t really anything permanent about it; it changes each and every time you consider it. Therefore if you don’t love whatever you see, you can work to modify it.
2. Actually looking at your score will drive it down. A lot of people who check the credit reports of theirs may notice that they’ve a lot of inquiries on file, particularly if they have been searching for credit in the past few months. While it’s true that experiencing way too many inquiries on your report could dock you a few of points per inquiry, those’re just the “hard” inquiries – all those manufactured by lenders and creditors into the file of yours to determine the financial threat of yours. Anytime you check the credit score of yours yourself, it’s called a “soft” inquiry and does not ding your credit rating.
2.
Actually looking at your score will drive it down.
3. You want a parity to build credit. You gotta spend money to make money. That saying could apply in some cases, however, not to credit. You don’t have to maintain a balance to build up the credit of yours. Based on FICO, just 35 % of your baltimore credit repair service (stay with me) score is made up of the payment history of yours, and many creditors are not looking to see if you have a balance over every month on your credit cards. Be concerned about keeping current on the bills of yours rather than what type of balance you should maintain.
3.
You want a parity to build credit.
4. When you get married, so do your credit scores. Even though you do guarantee to stay with your spouse through richer or poorer, the credit score of yours does not. Though your significant other’s credit lines can appear on your credit report, and vice versa, after marriage, the person credit reports remain as simply that – individual. Your account might appear on their report, although it continues to be in your name – only accounts opened jointly affect both parties.
4.
Whenever you get hitched, so do the credit scores of yours.
5.
Disputing every negative item on your credit report boosts your score.