Credit Report Facts Not Rumors and Myths

Do you remember what your mother told you? Don't believe half of what anyone tells you. Well with credit reports that is absolutely true. Our neighbors, relatives and friends hearts are in the right place just not the facts.. There are a lot of myths flying around about what you should and shouldn't do to improve your credit reports and credit scores. The buck stops here! We have the facts to provide you and your informers with the truth about credit and how to fix or raise it easily.

Your score drops when you check your credit report
False; this one is definitely not true. Checking your own report and fico scores is counted as a “soft inquiry” and doesn’t influence or harm your credit in any way. Only “hard inquiries” from  lenders, credit card companies or creditors, made when you apply for credit, can bring your credit score down a few points. Worried about damaging your credit while shopping around for a loan? Multiple inquiries for the same purpose within a short amount of time (a few weeks) are grouped together into a less damaging period of inquiry. This also eliminates the problem of all those free credit card mailings you recieve.

Closing old accounts will improve your credit score
 Many people some of them credit counselors and consultants who have to show action to receive payments, say closing old or inactive accounts is a way to improve your credit. Sadly most of the times it has the opposite effect. Canceling old credit accounts can lower your credit score by making your credit history appear shorter. This is also has the same effect when you do not have many active loans. Your score can drop if you get rid of any good accounts active or not active. Leave well enough alone. Think again before closing the oldest accounts.  If you want to reduce your levels of available credit, ask for your credit limits to be lowered or close new accounts instead.

Pay off a negative record and it is removed from your credit report
This one is false too. Negative records such as collection accounts, bankruptcies and late payments will remain on your credit report for 7-10 years. Back in the 1980's and 90's it was 7 years an since the last big credit failure the years have gone up to ten. Paying off the account before the end of the set term doesn't remove it from your credit report, but will cause the account to be marked as “paid.” It is still a good idea to pay your debts, it can improve your credit score, but the major improvement will come when the record expires. Also do not be afraid to apply for credit even shortly after a bankruptcy. You defiantly want to apply after your major debts have been marked paid. You can get a better score faster in this manner. One or two late pays after they are one year old rarely cause problems.

Being a co-signer doesn't make you responsible for the account
Wrong!! When you open a joint account or co-sign on a loan you are taking on legal responsibility for paying of the debt. Co-signors just gives the lender two people to chase instead of one.  Any activity on these shared accounts, good or bad, will show up on both people's credit reports. If you co-sign for a friend's auto loan and they don't make the payments, your credit profile will be hurt by their actions and visa versa. The only way to stop this double reporting is to refinance the loan or to have the creditor officially remove you from the account.
 
Paying off a debt will add 50 points to your credit score
This is just someone's way of getting your money for raising your credit score. Your FICO  score is figured using a complex algorithm that takes into account hundreds of factors and values and here is a hard fact. No one but a few executives from the credit reporting agencies know what the algorithm uses to figure your score. It is not only  very hard to predict how many points you can gain by changing one factor but it varies from week to week an month to month.  For a person with a high credit score, just one late payment can cause a significant drop. If a person has a low credit score, it may not cause a large drop at all. There is no real secrets to improving your credit score or fixing a bad one. But we have all the information, letters and ways to show you how to do it easily. If you just keep paying your bills on time, reducing your debts and removing negative inaccuracies from your credit report. Good financial behavior, time and this information .are the three  important factors to fix present poor credit and raise average to good and good to very good..