Common Credit Report and Credit Score Misconceptions

When seeking your credit report and retrieving your credit score often you will begin to believe certain misconceptions. This is a result of consumer misinformation that is passed around word of mouth and/or by very badly written articles intended to be informative.

Here are some misconceptions that need to be corrected. Please view below:

1. Often people make the mistake of believing that paying off debts will make a person’s credit instantly clean again. However, your credit report as well as your credit score usually is a culmination of financial history that dates back several years. There is no such thing as instant credit cleanup.
2. A person fears getting credit counseling. They think it will ruin their credit score. However, the sooner you get help the sooner you credit can be repaired. It all depends upon the settlement arrangements made between the debt negotiator and the creditor. In any case, getting accounts brought up to date always helps.
3. People often rush to cancel credit cards thinking that is supposed to help. However, this will NOT help at all. It is important to have two or three credit cards open just to show future lenders and creditors how capable you are of handling debt.
4. People think that if they are in good standing they do not need to check their credit report regularly. However, it is highly recommended that you do because fraudulent activity could go undetected if you do not.
5. Couples who get divorced think that their credit history is separated automatically. However, this is actually a messy situation in that a divorce does not directly affect past history with creditors. Marks on joint credit are likely to remain unless certain legal provisions are made.
6. It is a common believe that all bad marks on a credit report fall off after seven years. However, Chapter 7 versus Chapter 13 bankruptcy actually stays on file for 10 years.
7. There is a belief that paying someone to repair your credit will fix everything. Again, there is no such thing as instant credit repair. No matter what method you use to try to better your financial past and future it will take time to repair your credit.

More Info

You are entitled to receive a free copy of your credit report once every 12 months. You can secure it from one or all of the three national credit bureaus: Experian, TransUnion, or Equifax.