Myth
1
It is impossible/takes forever to dispute information
on my credit file. |
| FACT
: By law, the bureaus have only
30 days to complete an investigation on your credit
file – all you have to do is request it! |
|
Myth
2
My bad credit will haunt me forever. |
| FACT
: By law, negative information
can only stay on your credit file for seven years
(bankruptcies for 10 years). Also, the past 24
months are the most sensitive – older negative
info will hurt your score less than more recent
information. |
|
Myth
3
It doesn't matter when I pay a collection, because
as soon as I pay it, it will be removed from
my credit report. |
| FACT
: It's best to pay a collection
as soon as you're aware of it. If you wait to
pay a collection, the date will remain current
affecting your score more severely. Also, paying
it does not remove it – it will remain on your
file as a paid collection, which is still a derogatory
item. |
|
Myth
4
My score will drop if I apply for new credit
(inquiries). |
| FACT
: Inquiries are a very minimal
part of your score calculation. Also, multiple
inquiries from mortgage or auto lenders within
a short period of time are typically treated as
a single inquiry. |
|
Myth
5
It doesn't matter how high my credit card balances
are, as long as I make my payments on time. |
| FACT
: Maxed-out credit cards are viewed
as a negative item. Try to keep balances at or
below 30% of your available credit. |
|
Myth
6
It's a good idea to open up an account if I'm
offered a discount at the store or 0% interest
for a few years. |
| FACT
: Opening up a new account through
a finance company has a negative impact on your
score. On top of this, it will likely by reported
as a maxed-out revolving account – another negative
factor! |
|
Myth
7
I should close out old accounts that I don't
really use anymore. |
| FACT
: Those old accounts show nice
long payment histories and add positively to your
credit. Your score is based on both positive and
negative credit. Keep them open and use them every
six months or so just to keep them active. |
|
Myth
8
If I cosign on a loan, it won't affect my credit. |
| FACT
: By cosigning, you are signing
on as a responsible party for that loan. It will
affect your credit! |
|
Myth
9
Lenders will judge me based on my credit score
alone. |
| FACT
: While a credit score is an important
factor, lenders also look at factors such as your
debt, income and employment history. |
|
Myth
10
If I dispute my information with one bureau,
they will send the updated info to the other
two. |
| FACT
: The bureaus don't share information,
so it's up to you to contact all three bureaus. |
|
