Credit Score Myths
August 25th, 2008
I’ve been hearing a lot about credit score myths these days in the Credit Talk forums.
You know the ones: “quick and easy ways” to magically add points to your credit score in a short period of time. Usually they are the same ones that have been circulating for years, like these two:
- Close any credit card accounts you don’t use, increase your income and your credit score will increase!
- Just use cash to pay for everything and your credit will be perfect!
I hope you haven’t fallen for any of these. If you have, I’m happy you are taking the time to visit this site and educate yourself about credit cards. It’s definitely a step in the right direction.
Top Credit Score Rumor
Many of these myths probably began when some ingenious word of mouth marketing campaign was put in place by a highly-paid marketing professional on behalf of a credit card company. My personal favorite is when people actually try to convince me that leaving a monthly balance on their credit cards will make them look like a better credit risk and therefore build their credit score faster. I have no idea why this one is so easy for people to believe. It just doesn’t make sense.
Remember, more monthly balances simply equal more interest income for credit card issuers. Aggregate that additional income from millions of people who believe the rumor, and we are talking about a lot of cash.
The truth: the speed at which you establish credit has absolutely nothing to do with whether you carry a monthly balance or not. The things that really matter have never changed:
- Pay your bills on time
- Manage your credit utilization
- Pay down debt
- Correct errors on credit reports
- Apply for new credit sparingly.
Do you have any favorite credit card myths you’ve heard from friends and relatives? If so, we would love to hear about them. Leave a comment or check out our credit card learning center for more information.
Posted By: Joshua Heckathorn | Category: Credit myths, Credit Scores | Comments (1)
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