Do you understand how your credit score is calculated? Do you fully understand how a late payment or lack of prior credit history impacts your ability to get a loan? Most people don’t have an intimate knowledge of what it takes to have and maintain a good credit score. Therefore, many myths about credit have spread and gained acceptance as truth.
1) Cleaning Up Your Credit Report Is Hard
In reality, it is easier than you think to clean up your credit report. You can even do it on your own if you want to. The trick is to make timely payments now regardless of any other outstanding debts. Debts that are 90 or more days past due can be settled with your creditors for pennies on the dollar.
2) Bad Marks Never Come Off Of Your Credit Report
The truth is that blemishes on your credit report will be removed within seven years at the latest. The only exception to that rule is a Chapter 7 bankruptcy, which will stay on your credit report for a decade.
3) You Can Start From Scratch
You will never get a second chance to have a clean slate with your credit. Instead, you should work toward improving the credit history that you have established already. Lenders such as Power Finance in Arlington will help you. You can also visit http://www.powerfinancetexas.com for more information.
4) Creditors Always Report Accurate Information
Inaccurate information is reported to credit agencies all the time. Mostly, this is the result of a creditor failing to update their own records or taking actions on their own that don’t reflect your current standing with that creditor. If you see something that is incorrect on your credit report, have it changed immediately by talking to the credit bureau.
5) Cancelling Your Credit Card Is A Good Thing
Cancelling a credit card is never a good idea. All this does is reduce the length of your credit history. If you need to stop using a credit card, you can cut it into a million little pieces and never use it again.
Taking these myths as the gospel of credit can be a dangerous and irresponsible move to make. While you tend to believe things that you have heard over and over again, merely repeating a lie doesn’t make it true. Knowing the truth about these credit myths can help you rebuild your credit in a responsible and legal manner.