Common, Persistent Myths About Your Credit

By: Ralph Hipp, 13 News at 4
By: Ralph Hipp, 13 News at 4

Common Persistent Credit Myths, as seen today on "13 News at 4" with Robert Baker of HCCI

“Checking your credit hurts your credit score” – This could possibly be true if you have a number of “hard” inquiries such as credit checks by lenders or car dealers. FACT: Checking your own credit is a “soft” inquiry that cannot affect your score. This particular myth discourages people from checking their reports. The Consumer Law Center of Boston estimates that as many of 10-15% of all credit reports have errors that need correcting.

“Asking for lower limits will help your credit” FACT: A healthy credit limit can be a good thing, as long as you don’t use it to run up debt. Under FICO scoring revisions that took effect Dec. 2009, if a consumer has a balance of more than 30% of their available credit card limit it could result in points being taken off your score (diminished credit capacity). These days lenders like to see a big gap between credit limits and the amount of credit you’re using.

“You need to carry a credit card balance to have a good score” FACT: You don’t need to be in debt or pay a penny of interest to have good credit. Credit Reporting agencies don’t “know” whether you’re carrying a balance or paying off in full each month because the balance reported to credit bureaus is typically from your last statement – not what was left over after you paid the monthly bill. So you might as well pay in full and save the interest charges.


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