When looking to improve one’s credit score, many attempt to do it themselves and ultimately do more damage than good. While there is a plethora of information readily available on the internet, it is easy to misinterpret the language and implement the wrong strategies. To help you avoid making disastrous mistakes that will only dig a deeper hole, our professionals at Quality Credit Repair have debunked three of the most common credit score myths.
“If I close out my credit cards, my credit score will improve.” Since one of the major factors that determines a score is the debt utilization ratio, closing a card can lower your credit. The ratio weighs your debt and your available credit. By closing a credit card, you are lowering the amount of available credit without lowering your debt, which results in lenders seeing you as a greater risk. Others think that by closing a credit card, they are deleting its history. Unfortunately, any blemishes will show up on a report up to ten years later.
“Having my credit score will not have an impact on it.” Many often fall under a false sense of security due to a lack of understanding. Inquiries fall into two camps. They can be either soft or hard. A soft inquiry happens when you check your score with a bureau. Inquiries of this nature will not impact your credit score. Those that fall into the hard inquiry category will have a small impact on your rating. They occur when an outside party looks at your credit score. The reason it impacts you is due to the appearance that you were unable to meet a financial obligation.
“As long as I pay my balance, my credit score will be fine.” Often, the day a credit card company reports to a bureau is not the day after you pay your balance. Since the company may send the report right before you pay, it can be reported that there is a large sum on the card, even if it is paid in full the next day. It is best to air on the side of caution and never have more than 30% of your available credit used.
By realizing these statements are false and can have a negative impact on your credit score, you will improve your chances of working towards a better report. If you are concerned that you hurt your score, set up a free consultation with one of our dedicated experts at Quality Credit Repair. Not only can we help you find the costly mistakes you are making, but we can also show you how to fix them.