Credit scores have not been around forever. In fact, they are a fairly new concept to the American consumer, and just like all new concepts they take some time to get used to. However, in the meantime, the notion of what a credit score is has been clouded by myths aimed scaring consumers into using products and services they may not even need. The knowledgeable staff at Credit Advocates Law wants to put an end to these myths and put power back in your hands.
#1: Having too high or too low of a card limit will hurt my
The limit on your credit card has nothing to with your credit
score. What lenders are actually looking at is the gap between the limit that is
set and how much credit you have actually used. The larger that gap, the better
your score will be. However, having a higher limit is not always the best option
for some people. Track your monthly spending and see what works best for you. If
you can keep your credit usage low and continue to pay bills on time, you will
see it reflected in your score.
#2: Keeping the same credit card for a long time will improve my
This is one way that creditors trap people into staying with
their company, even though the terms and conditions of the card may be
undesirable. Lenders are more interested in your payment history and credit
utilization that we discussed in the last blog, not the amount of time you keep
a card. Plus, after you get rid of a credit card it can still influence your
credit score for up to ten years.
#3: Credit scores say the same thing about everyone.
When it comes
to credit scores, a bad number to one person may be outstanding for another.
Your score is analyzed on a personal level by lenders who look at age,
background and family history. This is important to keep in mind when checking
out credit report websites, as they do not account for your personal history.
through debt resolution can be emotional. Understanding your credit score and
the myths that go along with it can help protect you throughout that process.
Keeping yourself informed is crucial when it comes to pulling yourself out of
debt and avoiding costly scams. Keep checking our blog for more tips and advice
on credit-related topics and services.