subject: Top Credit Myths [print this page] Top Credit Myths Top Credit Myths
Building your credit rating or score is a long and difficult process, but it's also one that's fraught with myths about what affects your score positively and negatively. Some of the top myths include beliefs such as closing old accounts will improve your rating, scores will decrease if you perform a check on yourself, paying off a negative record will make that record disappear and how a negative credit will remain with you forever but these are all not quite true, or even completely wrong. But is there a reason so many people believe the above statements are correct? Is there some truth to them? For some, perhaps, but maybe not for others.
Closing old accounts that you no longer use may sound like a good way to improve your credit score. It neatens up your accounts and shows that you're on top of things, right? And with fewer accounts under your name surely that makes you seem more responsible, doesn't it? Well, the closure of accounts could actually lower your credit rating because if you are in debt the loss of the available credit from that account can impact your debt to credit available ratio, making it look like you're even less able to pay off your debt so only close old accounts if you can afford' to.
If you perform a credit check on yourself, your rating will not be impacted. A check done by you is considered a soft inquiry' and in many cases is not even recorded. One by a lender or creditor, however, may drop your rating slightly, so apply for credit and loans without frivolity.
When you pay off a negative record on your report, it's definitely a good thing but it doesn't mean that record will disappear. As part of your history, you're stuck with it, although the fact that you have now paid it off is a definite bonus towards how your score will change. That said, negative records do disappear eventually after about seven to ten years. Which leads us onto the final myth of how negative credit will always be with you: this is wrong. As just stated, negative records disappear and a credit report is more of a snapshot of your current credit status rather than a lifelong tar, so just keep moving away from your negative records and know that your constantly-changing credit will improve.
You can improve your credit by simply avoiding doing anything bad', whether you're using a loan or an online credit card - and if you do have poor credit, don't worry. It won't last forever and if you use credit responsibly, you'll eventually get back to a good score.
The author of this article is a part of a digital blogging team who work with brands like Barclaycard. The content contained in this article is for information purposes only and should not be used to make any financial decisions.
