Top 5 Credit Misconceptions
Top 5 Credit Misconceptions

We have all heard the rumors...from neighbors, relatives, or friends. A wide variety of myths float around about what you should and shouldn't do to manage your credit. Credit Karma has exposed these urban legends to provide you and your informers with the truth about credit:

Your score will drop if you check your credit - Fortunately, this one is definitely not true. Checking your own report and score is counted as a "soft inquiry" and doesn't harm your credit at all. Only "hard inquiries" from a lender or creditor, 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.

Closing old accounts is a good idea - To close or not to close, that is the question. Many people advocate closing old and inactive accounts as a means of managing their credit. But they should think twice before closing the oldest account on their credit reports. Canceling old credit accounts can lower a credit score by making the credit history appear shorter. If you want to reduce your levels of available credit, ask for your credit limits to be lowered or close newer accounts instead.

Once you pay off a negative record, it is removed from your credit report - Negative records, such as accounts in collections, bankruptcies, and late payments will remain on your credit reports for 7-10 years. 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, just be aware that the major change in your report won't come until the negative records expire.

Being a co-signer doesn't make you responsible for the account - When you open a joint account or co-sign on a loan, you are taking on legal responsibility for the account. 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 vice 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 - Your credit score is calculated using a complex algorithm that takes into account hundreds of factors and values. It is very hard to predict how many points you can gain by changing one factor. 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. Just keep paying your bills on time, reducing your debts, and removing negative inaccuracies from your credit report. Good financial behavior and time are the two most important factors for your credit score.

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I wouldn't trust wells fargo ever. They cheat and lie to there customers.I guess when you have that big of a company you can do that.Make sure you check into who handles your business as wells fargo picks up alot of others clients.

Comment by
willbynum12

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It is low because you DO NOT have a mortgage. A mortgage shows responsibility and will raise your scores the most out of car loans and credit cards.. 

Comment by
Lasardo

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Helpful to 1 out of 1 people

A mortgage is not necessarry to attain a good score. I've never had a mortgage and my score has been running in the 760 area.

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Reply by
chief0

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I DO NOT have a mortgage because I paid it off in full.  Should I go buy another house just so I can raise my credit score????? 

Reply by
lesliegeorge

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I have 3 public record reports and those are incorrect how do I get this removed

Comment by
Schoolgirl65

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Start disputes with the 3 major credit bureaus.

Although they like to hide the links that allow you to dispute negative information.

You can still do it online.

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Reply by
Martinho69

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How long does it take for your credit score to start to o up after you have a 30 day late charge on your account? Does anyone have any suggestions?

Comment by
jcgirl32

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Yes keep paying your accounts on time and you will see a difference after a couple of months.

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Reply by
Martinho69

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@d4rkened.  Absolutely AGREE with you on your assessment.  I have had the same issue as well.  Not only from this site, but all those ****ed pre-offers that I get not in in my USPS mailbox, but in E-mail as well,    I have CHECKED every time I get one of these so-called BS "soft-hits" and each time my credit score DROPPED like a hot potato!   And I have NOT done anything to lower my score, nor have I added any further debt to what I already owe and pay on.   So these "soft-hits" are a load of crap and there is NOONE that will convince me otherwise from what I have experiened with them, just as you have!

Comment by
Cataptra

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I AM A DISABLED TRUCK DRIVER,NEVER BEEN LATE ON ANY OF MY MONTHLY PAYMENTS. MY CREDIT SCORE WAS 760, PAID OFF AN 18 MONTH LOAN FROM MY BANK 1 MONTH EARLY. NOW MY SCORE IS 737. CAN SOMEONE EXPLAIN WHAT HAPPENED? THAT DOESN'T MAKE SENSE. YOU WOULD THINK IT MIGHT GO UP INSTEAD OF GOING DOWN. SORRY ALL CAPS,BUTTON STUCK

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Comment by
RESANDLIN

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Yes your no longer showing an open account and that couldve been your oldest account that in turn affected your age of accounts.

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Reply by
Martinho69

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Is a store credit card considered a "hard Inquiry" or is it just actual credit cards from companies?

Comment by
CMoore2324

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Anyone who runs your credit is considered a hard inquiry unless it was a promotional inquiry more commonly known as a soft inquiry.

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Reply by
Martinho69

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how does having someone as an authorized user on your credit card effect my credit score (or theirs for that matter)?

thank you

Comment by
dasuvet

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Your credit will become their credit and if you have a spotless credit history it will help them.

Them affecting you I dont see this happening unless they go hog wild on yor accounts and dont pay their share.

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Reply by
Martinho69

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i just had my car loan paid 8 months earlier, my bank reported credit bureau as account

closed. And now i see my credit score dropped more than 20 points. If anybody can

explain me i'll appreciate.

Comment by
khichro

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With the 12 accounts on collections as I looked into, none of them that I am aware of nor known the accounts were owed by me.  I never had done with these accounts.  I need to know what they were coming from and who put them in without me knowing.  How am I get some kind of help to investigate the error collections and the credit history which I did not use and never use.  Should I apply it as a fraud, stole my credit information to use whatever the person was using my name and information in the past.  Well, many years ago to recent in 2007 present, I hadn't been understood in this credit bureaus. My friend who knew more than me through the bureaus.  She helped me with that and I had no way of knowing nor understanding what these are all about.  She explained about it.  I had a hard time to understand the credit scores and what kind of owed and credits were used by someone or me.  I looked at the credits on my profile right now.  I tried to figure out where these collections were posted on and where the money owed was coming from?  To be honest, I had troubled in reading and understanding the reports.  If I had known of it, I would not write this post on.  The truth is...who used my credits to let someone to use or loan the money because I had a good credit in the past.  I noticed the credit scores started to fall in the late 1990's to present.   I had not been requested for a loan at any banks. I requested for a auto loan here in PA, the guy told me they can't loan me because of my poor credit history. I was like what kind of bad credit history did I have?  The guy said the credits were from the three major bureaus.  He thought the bureaus might had posted on error or by a stolen person using my name and information in the past.  Can any one there who can help me with investigating these errors and stolen money through my outstanding good credit scores.   Thank you for reading my note.  

Comment by
Snoopylover12

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definitely you want to call a fraud line and the police

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Reply by
Strapples

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