Common Credit Score Myths Debunked: Fix Your Credit

Your credit score plays a crucial role in your financial well-being. It can affect your ability to secure a loan, get a credit card, buy a car, or even rent an apartment. However, there are many myths surrounding credit scores that can lead to confusion and unnecessary stress. In this article, we will debunk some common credit score myths and provide tips on how to fix your credit.

Myth #1: Checking your credit score will lower it
Many people believe that checking their credit score will have a negative impact on it. However, the truth is that checking your own credit score is considered a “soft inquiry” and does not affect your credit score. In fact, regularly monitoring your credit score can help you identify any errors or fraudulent activity that may be impacting your score.

Myth #2: Closing old accounts will improve your credit score
Some people believe that closing old credit accounts will improve their credit score. However, the length of your credit history is an important factor in calculating your credit score. Closing old accounts can actually shorten your credit history and negatively impact your score. Instead of closing old accounts, consider keeping them open and using them responsibly to maintain a positive credit history.

Myth #3: Paying off a collection account will remove it from your credit report
Many people think that paying off a collection account will automatically remove it from their credit report. While paying off a collection account is important for improving your credit score, it will not remove the account from your credit report. Collection accounts can stay on your credit report for up to seven years, but their impact on your credit score will decrease over time as they age.

Myth #4: Closing credit cards with high balances will improve your credit score
Some people believe that closing credit cards with high balances will improve their credit score. However, your credit utilization ratio is an important factor in calculating your credit score. Closing a credit card with a high balance can actually increase your credit utilization ratio and negatively impact your score. Instead of closing high-balance credit cards, focus on paying down the balance to improve your credit score.

In conclusion, it is important to be aware of the common credit score myths that can lead to misunderstandings and misinformation. By debunking these myths and following best practices, you can take control of your credit score and improve your financial well-being. Remember to regularly monitor your credit score, maintain a positive credit history, and use credit responsibly to fix your credit and achieve your financial goals.