Credit MythsBelieve it or not there are a few Credit Bureaus and Creditors that know certain things they’d rather not have you know. Today we are going to have a look at some of these points as we believe these are things you should know. Credit is such an important aspect of your life and these are some of the key points you need to know when fixing your credit or even checking up on your existing credit. Making sure you know how to fix your credit in the future in case you may experience some problems after taking out a loan or certain contractual agreements.

So let us look at a few worries that everyday people like you and me have when worrying about their credit score and overall credit rating.

One common misconception is that people believe paying their debts will make their credit report instantly pristine. Unfortunately, this is not true. Although paying your debts will make your credit score better and show companies that you’re able to get back on your feet and keep up with your payments. It will not affect your overall credit history. These records are kept for a reason, so companies know whether or not you have had trouble in the past with loans and if it would be worth lending you the money. They will look over your entire past credit history when approving you and unfortunately you cannot change the past. They will take everything in account. Although if you have suffered bad credit in the past and you make the effort to correct it and help it, it will not make your report pristine, but it will show companies how you were able to pull yourself back on your feet and pay off your outstanding debts, giving you a better chance in the long run.

Next there is the fact about whether or not canceling credit cards will boost your score. This is true and false in a manner of speaking. Having multiple open accounts may show that you are subject to more potential debt, although on the other hand, your loan company wants to see how well you can manage your debts and how you are able to pay them back. So having too many open accounts may be bad for you, although if you are able to keep up with all the payments and show how reliable you are to paying back your debts this in turn would be a good advantage to you. We suggest having a few accounts open, but not too many. Obviously this would also be hard to keep track of on your part.

Another popular misconception is checking my own credit report harms my standing? This is untrue, checking your own score will not have any effect. You personally need to be able to see your credit score so you can make assessments on how well you are doing and if it may be wise to take out another loan based on your current score.

Although be advised not all credit checks are alike. It is true than when a lender or a bank take a look at your personal credit score that it may be taken down a few notches (a hard inquiry) but this is due to these financial institutions looking to see how well you are able to keep and maintain your score. This leads us onto our next myth about your credit score – “I don’t need to check my credit report if I pay my bills on time”. Even though you are paying your bills on time you still need to keep an eye on your overall score.

You may be subject to information on your credit report that has nothing to do with you; just because you are keeping up with your payments doesn’t necessarily mean you won’t be subjected to receiving false or wrong information. There is also a scare about personal identity theft nowadays as well. This is becoming a major thing and if someone has managed to steal your information and open several accounts in your name, then it’s best to keep an eye on your score. These things can happen if you happen to be unlucky and not checking your credit score, even though you are paying your bills on time, may lead you to end up in this mess as you may not find out about it for weeks or months. So always be sure to keep an eye on your score, it helps with peace of mind and means you can sort any problems that occur with speed and precision.

These are just a few of the myths concerned with peoples personal credit reports and are very good to know and learn if and when you are checking your score or trying to repair your overall score. Credit is so important these days and you want to make sure you are always on top of everything, personally.

Having a great credit score will help you save a lot of money and make your life much easier. By improving your credit scores, you can achieve your dream home, a new car, credit card approvals, and even employment. You will reap the benefits of: lower interest rates on credit cards and loans, more negotiating power, get approved for higher limits, better car insurance rates, avoid security deposits on utilities and cell phone contracts, and easier approvals for rental homes and apartments. All of these benefits should be inspiring enough to motivate you to take action to improve your credit status. You have nothing to lose and everything to gain.

Written By Stephanie N Lawrence

Brought to you by: EzineArticles

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