It is amazing to think about some of the myths that people believe when it comes to repairing their credit scores. As you already know, bad credit can wind up costing you thousands of dollars every year in higher interest rates. Heck, having a bad credit score can even prevent you from getting a loan to begin with.
If financial problems have caused you to have a lower credit score, you can take action to start improving your credit rating right now. Before you begin the process of repairing your credit score, though, it is important that you are prepared and that you have a good grasp on the credit repair processes that actually work.
To help you out, we decided to bust a few of the most common credit repair myths that people tend to fall for. Here are some myths that you need to be aware of when you set out on your mission to repair your credit score…
Credit Repair Myth #1 – More Money Equals Better Credit
People often believe that if they only made a little more money every week that they would be able to have a higher credit score. While it is always wise to strive for a higher income, making more money doesn’t necessarily mean that your credit score will improve. Your income does not factor into your credit score; it is all about how you handle your income level in relation to the debts that you pay off.
Credit Repair Myth #2 – Closing Credit Card Accounts Helps
People often panic when they find out that they have low credit scores, and then turn around and start canceling their credit cards. Did you know that closing old credit card accounts can actually hurt your credit score? It is true! When you close those old accounts you reduce your available credit and your length of credit history. Instead of closing those accounts, simply stop using the cards, even if it means cutting them up.
Credit Repair Myth #3 – You have to Open New Credit Card Accounts to Improve Your Score
On the opposite end of the spectrum from myth #2 is the belief that opening new credit card accounts will immediately improve your credit score. Sure, it is nice to have the ability to open a new account, but doing so, especially if you apply for lots of credit cards in succession, will actually lower your credit rating. Hard inquiries on your credit report indicate that you are desperate for money and make you appear to be more of a risk to lenders.
Credit Repair Myth #5 – You cannot get past Credit mistakes removed from Credit Reports
No matter how bad your financial past was, even if it includes tax liens, bankruptcies and other problems, all negative listings on your credit report can eventually be removed. Most of the time, these red flags stay on your credit report for 7 to 10 years. You can often work with the credit bureaus, though, to get past mistakes removed if you show signs of ongoing progress in the months and years to come.
The important thing about credit repair is actually being informed and then taking action. Too many people fall for some of the myths that we just talked about and wind up losing hope. Credit repair is not rocket science and it doesn’t take the help of credit repair companies to improve your credit score. Remember the myths that we just debunked and get a plan of action in place today. Before you know it, your credit score will begin to improve…
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