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Wrong Credit Score Info I Found In Print You Must See
If you don't understand exactly what affects your credit score, you can't possible build an accurate action plan to try to improve it. Unfortunately there are several myths that many people truly believe about their credit score. I recently found two of these incorrect "facts" in print in an article that was part of a mass mailing of a "penny saver" type of publication. It wasn't the official Penny Saver so my apologies to the folks there, but that's the best way I can describe the publication in question.
Wrong Credit Score Info I Found In Print You Must See The article, entitled, "The Complicated World Of Credit Scores" attempts to talk about how lenders use different credit scores for different types of purchases. Although 80% of the article is accurate, it makes me angry to think how many innocent people now go forward in life believing the 20% of the information that is just plain wrong.
I can't control what gets published about credit scores by other media channels and I can't reach out to all the people who read the wrong information, but I can control what is we publish to ensure that you, my friends, get the accurate facts.
How Inquiries Affect Your Credit Score "If you refinance your home at a lower interest rate, inquiries could show up on your report. Inquiries lower a score."
The first part of that is correct; whenever you apply for a loan or credit card, an inquiry will show up on your credit report. However, credit inquiries are unlikely to lower your credit score and in the rare event that they do it would only be a small number of points (less than five points for most people).
The rare situation that causes inquiries to lower your credit score is if you chronically apply for credit at many places many times each month. Having a huge number of inquiries indicates that that you might be desperate and going around town applying for credit anywhere you can.
The credit bureaus have their credit score formula set up to allow consumers to shop around for credit. For example, if you are seeking a car loan and visit 5 auto dealers over the weekend and each dealer pulls your credit report, the credit score formula treats that scenario as one single credit pull, not five. This way you are not penalized for shopping around for the best deal.
How Long Late Payments Show On Your Credit Report Here is what the article explained about late payments:
"Late payments show up on your score for a couple of years, but paying down a high balance has an immediately beneficial impact."
The second part of the statement above regarding the pay down of high balances is true. However, the statement that "late payments show up on your credit score for a couple of years"" is inaccurate. First of all, nothing "shows up" on your credit score.
A credit score is a three digit number. That's it. Your credit score is separate from your credit report. More importantly, late payments will remain on your credit report for at least 7 years. As information on your credit report ages past the two year mark it has less and less impact on your credit score calculation. But it's still there.
Submit Your Credit Score Questions Have you been given credit score advice that you are not sure about or read an article that has conflicting credit score information from what you believe to be true? Reach out to a professional, qualified, financial advisor who will be happy to respond to your question.
Author Resource:-
Nathan Randall, editor, DailyDollar Newsletter provides free daily advice on money matters plus coupons and discount codes. FYI...you can now access the DailyDollar Newsletter via iTunes podcast, YouTube video, and on Facebook and Twitter too.
You may think the answer is low interest of course, but then you might be surprised. Whether you are in debt or not, credit cards are simply a financial tool and, like most tools, they can be used to your advantage or to your disadvantage.
This sounds like a fairly simple question but it is not quite so simple to answer and in trying to do so you need to view the answer from the perspective of both the borrower and the lender.
With debts and financial turmoil, you may be in a dilemma as to how to get out of your problem. No matter how much you desire to have your debts liquidated, you do not have the capacity to do so. You are burdened by the endless collection and demand letters. In such a situation you have only to see a well-experienced bankruptcy lawyer.
Credit reports are reviewed when you try to get credit, a job, mortgage, or insurance. Avoid surprises know what's in your credit report, get a free copy. If you think credit reports are only used when applying for a car loan, think again. Lots of other firms use them.
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