COMMON CREDIT MYTHS

When it comes to credit, knowing fact from fiction and understanding how to act is critical. Here are some common credit myths that may be preventing you from engaging in effective credit management:
MYTH: My score will drop if I check my credit.
FACT: Checking your own reports and score is considered a "soft inquiry" and has no negative impact on your credit score.

MYTH: There is only one score that all lenders use to determine my credit-worthiness.
FACT: There are literally hundreds of different scoring models used by the lenders in the marketplace today.

MYTH: Closing old credit card accounts will clean up your credit reports.
FACT: Some people advocate closing old and inactive accounts as a way to manage their credit. In most cases, closing your older accounts will make your credit history appear shorter, which can negatively impact your credit standing.

MYTH: Once you pay off a delinquent loan or credit card balance, the item is removed from your credit report.
FACT: Negative information such as late payments, collection accounts and bankruptcies will remain on your credit report for up to seven years. Certain types of bankruptcies stick around for up to ten years. Paying off the delinquent account won't remove it from your credit report, but it will update the account to indicate it as "paid".