Top 5 Credit Myths

Everyone has heard numerous stories from friends and relatives about how credit scoring works. Unfortunately, there are many myths that pass as facts. Here are 5 common myths:

  1. Your credit score will drop if you check your credit. (FALSE) Your credit score is not penalized when you check your own credit. You can check your credit score as often as you like without having a negative effect.  “Hard inquiries” from businesses and financial institutions in conjunction with applications have an effect on your credit score. Multiple inquires for the same purpose over a short period of time are usually grouped together (such as mortgage inquires) and will have less of an effect.
  2. Closing old accounts will improve your credit. (FALSE) Actually this has 2 negative effects. By closing older accounts you will shorten your available credit history. When you close an account you also reduce the amount of available credit which in turn reflects in a lower debt to available credit ratio. Keep the older accounts open and active. Make a charge or two each year and pay off the balance right away.
  3. Credit Bureaus share account information. (FALSE) The 3 Credit Bureaus (Trans-Union, Equifax, Experian) are independent companies and do not share data. Creditors may or may not report to all 3 companies. Because they are not all working with the same data you will find that your score on each of the services will differ. When monitoring your credit it is a good idea to check all three services.
  4. Paying off my debt will add 50 points to my credit score. (FALSE) Credit scores are calculated using a complex algorithm taking into account hundreds of factors. No one can tell exactly how many points you can gain by adjusting one factor. You can be sure though, that by paying down your debt you  will increase your score.
  5. I can hire a company to fix my credit score. (FALSE) Unless there are outright errors in your account, there are no quick fixes that will repair your credit. Only by employing responsible credit practices will your score improve over time.

Don’t wait until you need credit to check your score. Improving your credit score takes time. You should be proactive and begin to monitor your credit now. You can get a free credit report at:

If you are in the market to buy a home or just considering your options, it costs nothing to learn more. Call or email Linda  for a free, no-obligation, no pressure consultation – 910.409.3519,

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