6 Myths About Credit Scores [infographic]
Tweet |
(To enlarge via computer keyboard, hold ctrl key down while rolling mouse wheel forward/away from you)
6 Myths About Credit Scores
When it comes to credit reports and FICO scores, there is a lot of confusion about what actually impacts one's ability to open a credit card, finance a car, or purchase a home.
MYTH 1: Your credit score drops if you check your own credit.
Truth: Viewing your credit report counts only as a "soft inquiry" and doesn't change the score. "Hard inquiries" by a lender or creditor, though, can slihtly lower your credit score.
MYTH 2: You should close old or inactive accounts to help your credit score.
Truth: Closing accounts may actually have the reverse effect of lowering your credit score because it can shorten the measured duration of your credit history.
MYTH 3: Paying off a negative record means it's taken off your credit report.
Truth: Generally, negative records like collections or late payments will remain on your credit report for up to seven years.
MYTH 4: Cosigning doesn't mean you're responsible for the account.
Truth: If you open a joint account or cosign a loan, you will be held legally responsible for the account, meaning activity on the joint account is displayed on credit reports of both account holders.
MYTH 5: Making on-time rental, utility, and cell phone payments helps my credit score.
Truth: While outstanding rental, utility, and cell phone debt that have gone to collections can negatively affect your score, generally, on-time payments are not regularly reported to credit bureas.
MYTH 6: Your credit score reflects changes or trends in your payment behavior.
Truth: Historically, credit scores have not incorporated trended credit information, they are a moment-in-time glimpse at consumer risk.
(To see this infographic on its original site, click here.)
6 Myths About Credit Scores
When it comes to credit reports and FICO scores, there is a lot of confusion about what actually impacts one's ability to open a credit card, finance a car, or purchase a home.
MYTH 1: Your credit score drops if you check your own credit.
Truth: Viewing your credit report counts only as a "soft inquiry" and doesn't change the score. "Hard inquiries" by a lender or creditor, though, can slihtly lower your credit score.
MYTH 2: You should close old or inactive accounts to help your credit score.
Truth: Closing accounts may actually have the reverse effect of lowering your credit score because it can shorten the measured duration of your credit history.
MYTH 3: Paying off a negative record means it's taken off your credit report.
Truth: Generally, negative records like collections or late payments will remain on your credit report for up to seven years.
MYTH 4: Cosigning doesn't mean you're responsible for the account.
Truth: If you open a joint account or cosign a loan, you will be held legally responsible for the account, meaning activity on the joint account is displayed on credit reports of both account holders.
MYTH 5: Making on-time rental, utility, and cell phone payments helps my credit score.
Truth: While outstanding rental, utility, and cell phone debt that have gone to collections can negatively affect your score, generally, on-time payments are not regularly reported to credit bureas.
MYTH 6: Your credit score reflects changes or trends in your payment behavior.
Truth: Historically, credit scores have not incorporated trended credit information, they are a moment-in-time glimpse at consumer risk.
(To see this infographic on its original site, click here.)
Labels: 6 myths about credit scores, real estate infographic
1 Comments:
For more tips and information about you credit score in United States check out-How to check your credit score?
Post a Comment
<< Home