Bankrate.com has a good article that talks about 11 credit report myths which about the difference between people “know” about credit report and credit scores and as those monstrous Manhattan alligators.

 

11 Common Credit Report Myths:

 

Myth 1 : Paying my debts will make my credit report instantly pristine

Truth   : A credit report is a history of your payments and not a snapshot of where you re at the moment, so you cannot change the past

 

Myth 2 : Credit Counseling always destroys my credit score

Truth   : Attending credit counseling is not considered negative in the scoring model.

 

Myth 3 : Canceling credit card boosts my score

Truth   : Most creditors want to see at least 2 or 3 pieces of active credit to prove you can mange debt responsibly

 

Myth 4 : Too many inquiries hurt my score

Truth   : If a batch of mortgage or car loan inquiries arrives within 30 days, it doesn’t count at all, Watts says.

 

Myth 5 : Checking my own credit report harms my standing

Truth   : The reporting agencies distinguish between soft and hard pulls. When Target calls to check before issuing its line of credit, the agencies chalk that up as a hard pull and it counts against your score. Personal requests and credit counselors — if they do it correctly, so insist on this as part of your agreement terms — fall under soft pulls, which do not reflect negatively on the evaluation

 

Myth 6 : FICO scores are locked in for six months

Truth   :  FICO score changes as soon as data on your credit report change.

 

Myth 7 : I don’t need to check my credit report if I pay my bills on time

Truth    :  Please check because you don’t have any clue about what other activity going on in a particular period

 

Myth 8 : All credit reports are the same

Truth   : Equifax, Experian and TransUnion are separate companies and the speed in which they update records isn’t necessarily equal.

 

Myth 9 : A divorce decree automatically severs joint accounts

Truth   : Divorcing parties must contact the creditors for either close current accounts or have the booted name sign a letter of consent for this action

 

Myth 10 : Bad news comes off in seven years

Truth     : Accounts in bankruptcy can be deleted seven years after the date of your first missed payment

 

Myth 11 : I can always pay someone to fix or repair my credit

Truth     : Yes, you can clear up erroneous information posted to your account, such as a repossessed car that you didn’t purchase in the first place, but if you paid your Sears bill three months late in 1997, that’s a hard fact.

 

Resource : Bankrate.com

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