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Considering how valuable your credit report and your resulting credit score are to you, it never ceases to amaze me how many people believe and rely on misconceptions, myths, and downright bunk about how credit reporting really works. To function properly in today's society, a credit score must be at least the "ok" level, and people with bad credit poor credit only accelerate their downward spiral by not doing something.
The sad part is that there are things you can do to improve your credit score. Although these things take effort, they do not necessarily require money and these are things you can do at home.
Most people do not realize they have quite distinct three credit reports, one from each of the three reporting bureaus credit. Since these offices do not share information, they each report what they think they know, which in reality means that not one of them a true and complete your credit. To add insult to injury, the chances are extremely high your credit report with at least one (if not all) credit bureaus contains errors, and the only way to fix the errors, is if you removed their dispute. I've heard of people whose credit score jumped over 100 points in less than a month after they were inaccurate various pieces of information removed from their credit profile.
But we will spend some time here talking about some very common myths about credit, credit scores, and credit reports and discover what the real deal is on this misunderstanding.
Myth # 1: Paying off a negative account on your file Credit will be deleted from your report.
This is not true at all. This account will remain on your credit report for years, showing clearly to everyone that goes in pain, he went from crime, then you and it paid off. But as it is part of your credit history, it stays on your credit history for years. Remember, your credit history is exactly that – a story of your relationship with credit, and just because an account is closed or paid leave does not reject the fact that he is still part of your credit history.
Myth # 2: Paying off an account will result in your credit score to increase significantly.
Again, not true. There are many factors that come into play when the credit bureaus calculate your credit score. Foremost among these factors have you paid your financial obligations time with at least the minimum payment due. Repay any account may actually do more harm than good. Having credit in good standing, but keeping your balance below about 32% of your credit limit is a great place to be, and you gain no extra points by paying the account.
Myth # 3: Checking Your credit report will lower your credit score.
Again, not true. Financially sophisticated consumers check their credit report at least once a year, sometimes more often. Each time someone requests a copy of your credit report, it is identified, but it is also indicated as WHO requested your credit report. If it was you, then it does nothing for your credit score, as opposed to what your credit report requested by 12 different loan companies, which is almost sure to raise a red flag and lower your score.
Myth # 4: co-signed a loan does not mean that you are responsible for the account.
Not true at all. The reason you were invited to co-sign a loan or an account for someone because they themselves have insufficient credit history or have bad credit history. The act of you co-signing on it you say the financial institution "Hey, if they default on this point, I will take care of her," So you DO have the responsibility of the loan. But it gets worse – if the person who took out the loan starts to default on it, then it is your score credit suffers because, again, you co-signed on it, giving you some responsibility to ensure they pay time.
Understand how the credit game is played. You can not win a game if you do not know the rules, and since credit affects many different aspects of your life, it is well worth the time to understand the factors and myths about how your credit score is derived.
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Article Source: ArticlesBase.com – Debunking the Top Myths About your Credit Report
