Free Credit Score
 
HOME | CONTACT US | SITE MAP

FreeCreditScore.info


Common Credit Score Myths

A lot of credit score myths about fico score ratings get spread around and some of them are just outdated information. Sometimes even lenders can give you the wrong advice and it can get confusing. But the bottom line is bad information can cost you money no matter who you get it from. Fico score ratings are used for most mortgage lending, which means, you need to know what will hurt or help your credit score points.

To make it clear, here are some of the most common credit score myths. * Checking your credit report will hurt your credit scoreChecking your own credit report and credit score counts as a soft inquiry and does not go against your score. However, if anyone else like a lender or credit card company is checking your credit report, this is considered a hard inquiry and will generally knock off about 5 credit score points.


The credit score rating system treats multiple inquiries in a 14-day period as just one inquiry. The system ignores all inquiries made within 30 days prior to the day the credit score is computed. So if you want to minimize the damage from credit inquiries, shop for a loan in that short period of time. * Closing old accounts will improve your credit report scoreSometimes even lenders will tell you to close your old and inactive accounts as a way for improving your credit report score.

In most cases, closing old accounts will actually have the opposite effect with the current credit score rating system. Canceling old credit accounts can actually lower your credit score because it makes your credit history appear shorter. If you want to reduce your levels of available credit, it's better to reduce or close new accounts instead.

Applying for new credit is more likely to lower your score. * You need to check more than just FICO score ratingIf you ever hear this from anyone, consider it a red flag. All of the three major credit reporting bureaus offer FICO credit score ratings using the formula developed by Fair, Isaac. Even though each one gives the scores a different name you only need a fico score rating from the three major credit reporting bureaus.

At Equifax, the FICO score rating is called the Beacon credit score. At TransUnion, it? called Empirica. At Experian, it's known as the Experian/Fair, Isaac Risk Model. The reason each of the three major credit reporting bureaus will have three different scores is because they don? all share the same data.

So when checking your credit report, just make sure it comes from the three major credit reporting bureaus: Experian, Trans Union and Equifax. Examine your credit reports from all three major credit reporting bureaus before you apply for a big loan like a mortgage. Fix any errors in all three reports before you shop for a loan because it takes time to correct your credit report.

* Credit counseling will hurt your scoreThe current FICO credit score rating system ignores any reference to credit counseling that may be in your file. The researchers at Fair, Isaac, the company that created the FICO credit scoring rating system, found that people getting credit counseling didn? default on their debts any more often than anyone else. However, any late payments you've had with creditors will hurt your credit score.

Credit counseling can hurt your ability to get a loan because you probably have had trouble paying creditors. Some lenders will back away if you are in credit counseling. Others may see it differently, but usually will charge you higher interest rates than if you had perfect credit. The best way to improve your credit report score is paying your bills on time and paying down credit card debt.

Check your credit report regularly for any errors and make sure you don't fall for these common credit score myths. Copyright? 2005 Credit Repair Facts. com All Rights Reserved. This article is supplied by http://www. credit-repair-facts. com where you will find credit information, debt elimination programs and informative articles that give you the knowledge to correct your own credit and credit report.

For more credit related articles like these go to: http://www. credit-repair-facts. com/articles_1. html

Author:
Gary Gresham




Do you have a web site? Please link to us!


FreeCreditScore.info: Common Credit Score Myths

More Free Credit Score information:

Article: 5 Ways To Raise Credit Score 5 Ways To Raise Credit Score

Article: Tips On How To Fix Bad Credit Tips On How To Fix Bad Credit

Article: Save Money and Lower your Payments by Improving or Repairing Your Credit Save Money and Lower your Payments by Improving or Repairing Your Credit

Article: Five Reasons to  Repair Your Credit Score - You Can Do It Yourself Five Reasons to Repair Your Credit Score - You Can Do It Yourself

Article: Are the Credit Bureaus Really Helping Us Are the Credit Bureaus Really Helping Us

Article: The FICO Score Misconceptions The FICO Score Misconceptions

Article: Legally Clearing Your Credit Legally Clearing Your Credit

Article: Fico Scoring Basics Fico Scoring Basics

Article: Repairing Your Credit Score and Clearing Derogatory Marks on Your Credit Report Repairing Your Credit Score and Clearing Derogatory Marks on Your Credit Report

Article: What To Expect From A Credit Repair Company What To Expect From A Credit Repair Company

Article: Restore Your Credit Rating And Reduce Your Debts Restore Your Credit Rating And Reduce Your Debts

Article: Credit Repair Myths and Facts Credit Repair Myths and Facts

Article: Common Credit Score Myths Common Credit Score Myths

Article: What Is A FICO Score? What Is A FICO Score?

Article: 5 Ways To Prevent Credit Card Late Fees 5 Ways To Prevent Credit Card Late Fees

Article: Does Working With a Credit Counseling Organization Hurt Your Credit Score? Does Working With a Credit Counseling Organization Hurt Your Credit Score?

Article: Why Your Credit Score is Important Why Your Credit Score is Important

Article: Your Credit Rating and How To Check It Your Credit Rating and How To Check It

Article: Your FICO Score and Applying for a Loan Your FICO Score and Applying for a Loan

Article: Beware of Bogus Credit Repair Companies Beware of Bogus Credit Repair Companies

Article: Is Your Credit Score Being Held Against You? Is Your Credit Score Being Held Against You?

Article: Insurance Credi Scoring An Ethical Issue Insurance Credi Scoring An Ethical Issue

Article: Good FICO Credit Score?  Tips to Getting the Most Out of Your Home Mortgage Loan With Good Credit Good FICO Credit Score? Tips to Getting the Most Out of Your Home Mortgage Loan With Good Credit

Article: Credit Repair Services vs. Do-It-Yourself Credit Repair Credit Repair Services vs. Do-It-Yourself Credit Repair

Article: Credit Help for Real Estate Financing: Five Categories of Your Credit Score Credit Help for Real Estate Financing: Five Categories of Your Credit Score


 
Copyright 2000-2006 FreeCreditScore.info. All Rights Reserved.
Home | Contact Us | About Us | Site Map | Add URL