About 'credit advice'|Credit Card Advice From An Insider
Unfortunately, many people fall into credit problems not because they are irresponsible but because they listen to the so-called "facts" that they hear from relatives, neighbors, colleagues and friends. When a car mechanic is giving your advice about credit, it might be best to check the facts before making any decisions, especially ones that can affect your entire future. Misinformation spreads just as fast as good information, so you should be sure that you've received accurate advice before going any further. Following are the top five credit misconceptions that many people believe. Credit Misconception #1: Your Credit Score Drops When You Check Your Own Credit There are two different types of credit checks: soft inquiries and hard inquiries. When you check your own credit - such as ordering a credit report from one of the credit bureaus - it qualifies as a soft inquiry and does no damage to your credit score. When creditors and lenders - such as credit card companies and mortgage lenders - check your credit, it is a hard inquiry, and will damage your credit score if too many are conducted. The reason? Multiple inquiries produces a red flag for lenders because it demonstrates irresponsible credit behavior. Checking your own credit score is a matter of personal knowledge, and doesn't do you any harm. Credit Misconception #2: It is Best to Close Old or Inactive Accounts Many people, when they order a credit report, discover that accounts they opened twenty years ago are still open even though they no longer use the credit card. In an effort to "clean up" their credit report, they close those accounts, which can actually harm your credit score. Your credit score is calculated by a complex algorithm that takes into consideration many points, including the length of your credit history. When you close old accounts, it shortens your credit history, and may keep you from acquiring loans or lines of credit in the future. If you want to get rid of a few accounts, start with the newer ones first. Credit Misconception #3: Paying Off a Delinquency Removes it From Your Credit Report Unfortunately, this is not true. As soon as an account goes into collections or is unpaid by the borrower, it is marked on the credit report as such, and will remain for at least seven years. If you pay off the delinquency, the creditor is required to mark the account as "paid", but it will not be removed from your credit report. While having a "paid" delinquency is better than having one which isn't, you should still know that future creditors will see the delinquency on your credit report. Credit Misconception #4: Co-Signing for a Loan or Account Does Not Initiate Responsibility It is almost never a good idea to co-sign on a loan or to become an authorized user of a credit card. When your name goes on an account or loan, you take financial responsibility for whatever money is borrowed or used. This means that if the principle on the account fails to pay, you must make the payment for them or your credit score will suffer just as much as the other person. Unfair? Certainly! That's why you should be careful about signing your name to applications. Credit Misconception #5: Paying Off a Debt will Add "X" Points to Your Credit Score As mentioned above, credit scores are not simple calculations and it is impossible to determine how many points by which your credit score will increase when you pay off a debt. I've heard different numbers where this is concerned - 50, 75, even 100 - but none of them are true. While paying off a debt will improve your credit score, the exact amount will depend on many different factors. Check out CP Rachel Pickett's article: The Importance of Having Good Credit. |
Image of credit advice
Related blog with credit advice
- stwildonroleplaying.blogspot.com/...it's worth looking to videogames for advice, here's a list of links from the Extra Credits guys that can be useful for Games ...
- ghgemissionstrading.wordpress.com/... in New Zealand targeting potentially incomplete or misleading advice given on carbon credits by real estate agents http://tvnz.co.nz/fair-go/carbon-copy-video-4738017 Unfortunately...
- boardingarea.com/blogs/viewfromthewing/Advice on Choosing the Best Credit Card 2012 Credit Card Spending Strategy...s Amazing Travel Benefits Credit Card Churning: Making the Most...
- artists-beware.livejournal.com/...artist-somethingforeveryone/michael shor , beware Need advice/credit card fraud beware! This is both a... taken out of my credit card account with his business as the recipient...
- creditmama.blogspot.com/...two largest credit card companies...customer service. This advice is just one friend...Read #1. One neat trick credit card companies...can? One final word of advice. Try not to sign up...
- boardingarea.com/blogs/viewfromthewing/...this month is all about credit cards. While it draws heavily on my advice, Wendy does a great job...travel, most pieces on credit cards for instance...
- credit.typepad.com/...Sentinel's readers offer advice on how to control credit card debt. There's practical, sensible...book until you get it and use its advice to improve your credit. It's nonsense. I'm no lawyer...
- credit.typepad.com/...recently ran this "Reader to reader" article wherein the Sentinel's readers offer advice on how to control credit card debt. There's practical, sensible advice here that industry professionals like...
- subfivemiler.wordpress.com/... people who are sick of the “to get out of credit card debt, you need to pay it off”, here is some real advice. The main issue is likely the interest rates...
- guarantorloansuk.wordpress.com/Advice on poor credit loans At last the financial industry is... going to have a great or even a good credit score. As the expectations lower, a...
Credit Advice - Blog Homepage Results
Related Video with credit advice
credit advice Video 1
credit advice Video 2
credit advice Video 3