Common Myths about Credit Reports and Scores


There are as many wrong notions about the credit reports and FICO credit scores as there are credit files in the whole of Americas, it seems. Some of these are really funny while binding the believers of these myths into inaction even in the face of staring bankruptcy. Instead of going to find the root of it all, we can concentrate better on allaying the myths, taking one by one, at least the most common ones in the air.

Myth #1: Frequent checks into my credit report spoil my credit score
This is untrue as this is considered as soft enquiry and doesn’t harm your credit score a bit. However, enquiries by creditors and lenders, especially in a shorter span may bring the credit score awe bit, they are clubbed together to reduce their overall impact.

Myth #2: Negative points are removed soon after paying off of debts
Bad debts and negative remarks are going to remain on your credit report for 7 years and bankruptcy for 10 years as required by the law. They will go off automatically, once the term ends. The only way you can speed up their removal is by paying off the debt faster. Longer the term you take longer will they stay on your credit report.

Myth #3: My permission is required by anyone to see my credit report
This is true in just the employment case where an employer or a prospective one at that, can’t see your credit report without your written consent. Otherwise the FCRA permits the credit reporting agencies to show reports to any legitimate persons or firms.

Myth #4: Closing of accounts helps improve my credit score
Sorry, on the contrary, it reflects badly and triggers speculations in addition to reducing 10% points of your credit score. Long standing credit accounts without negative points get you the same points back.

Myth #5: Checking your credit report is unnecessary if you are current on all your bills
Wrong as you would be unable to tell if there is positive information missing or negatively reported.

The myths develop and spread by hearsays. For accurate information visit: http://www.ftc.gov/.

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