5 MORE CREDIT MYTHS
Posted on: Nov. 17, 2016 in Credit, Credit Score, Debt

Putting rumors to rest and dispelling bad information helps everyone. The more you know about how credit works, the better equipped you’ll be to make choices and raise your score. Here are a few more credit myths. How many of these have you heard before?

Myth #1 - Cash is king. Okay, so maybe this is true in the sense that you can’t get into debt if you use cash for everything. But you also can’t build up a credit history or prove you are a responsible borrower either. Using credit wisely is the only way to do that.

Myth #2 - Paying off your debts will clear your record. Having an outstanding balance, an unpaid bill or delinquent loans will have a negative impact on your credit score. Correcting those issues by paying off a loan or getting current will help your situation, but it will not erase the negative information from your report. This information will remain on your credit report for up to 7-10 years depending on the circumstances. However, taking care of your outstanding obligations will help your score and is worth your time and effort.

Myth #3 - If you didn’t receive the bill, they can’t hold that against you. Maybe you never got the bill or you were waiting for more information. Perhaps you simply forgot to pay a bill. No matter the reason your payment is delinquent, a service provider or creditor can still report the payment as late. If you have an issue with what you were charged or if a bill arrives that you weren’t expecting, take steps immediately to reach out to the provider. It’s far easier to resolve an issue before it becomes a blemish on your credit history than it is to clean it up later.

Myth #4 - If your credit score is low, you’re stuck with it. You can rebuild your credit. Taking steps to borrow responsibly, pay off outstanding bills, and making future payments timely can raise your score. Your credit history will change over time if you take steps to improve it.

Myth #5 - Credit is the enemy. Credit cards, loans and debt are not inherently bad. Sometimes borrowing is necessary to make a large purchase. Having credit available to you can help you in a distressing situation. But it must be used responsibly and respected for the tool that it is.

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