This article makes you aware of the various myths associated with credit reports. It is very important for everyone to have a fair knowledge of credit reports. The article contains valuable information regarding the following aspects of credit report:
- What are the common credit report myths?
- Is professional credit repair service required to lead a debt free life?
- Is it possible to overcome your credit problems if you have more money?
There are many credit report myths being passed on by word of mouth and even in print and online. These credit misconceptions may leave you confused. Worse, they can encourage you take the wrong steps to fix your credit, so that you end up with a worse FICO score than when you began.
Credit Report Myth #1
The Best Way to Fix Bad Credit is to Close Down all Your Accounts Closing down your accounts can actually hurt rather than help your credit score and your credit report. Most lenders want to see that you establish long-term relationships with businesses and pay regularly. Closing down older accounts, then, can actually hurt your chances at a good loan. Plus, by paying off large loans and closing accounts, your remaining loans will stand out in sharp relief. It is far better to keep your credit accounts and loans and simply work at paying off significant amounts of each debt.
Credit Report Myth #2
Mistakes Hurt Your Credit Report the Most
While mistakes and inaccuracies are certainly a common and aggravating problem, most people with truly bad credit get there on their own. Quite simply, bad credit is most often caused by taking out too much credit and then being unable to cope with the debt load. Sudden emergencies – such as divorce, illness, or unemployment – can suddenly cause previously burdensome loans to become quickly overwhelming. The best thing you can do to safeguard yourself against this problem is to practice good money habits. Spending less than you earn and putting some of your money away for an emergency is a great place to start.
Credit Report Myth #3
You Need Professional Credit Repair Services to Live Debt Free
This is one of the credit report myths that some companies would want you to believe. However, many of the things that you can do to repair your credit – such as paying bills on time and paying off your debts – you can do yourself at no charge. Even some of the fancier things that credit counselors can do – such as negotiating with companies, arranging refinancing, or creating payment schedules – are things that you can do yourself. While you may want some credit help if you are overwhelmed by your debt, most financial experts agree that there is a lot that credit self-help can offer. Some customers have had bad experiences with credit repair services, and some companies offering credit help seem to be anything but reputable. Helping oneself to better credit may be the safest as well as the most cost-effective solution for many customers.