Don’t Fall for These 5 Credit Score Myths

If one of your goals for the new year is to buy a new home, then a vital part of that goal is to improve your credit score. Don’t let these credit score myths catch you off guard.

1. Credit cards should always have a modest balance. The truth is that credit scores are positively impacted by bills that are paid off and negatively impacted by credit lines that are constantly maxed out.

2. It’s not a big deal if you make a payment on a credit card a day or two late, as long as you pay it off in full. The reality is that your credit score benefits from timely payments of the balance due. Scores can drop as much as 100 points because of late payments.

3. To eliminate negative credit history, close out old credit cards. Since the credit history from a closed card follows you for seven years, take advantage of the fact that the longer you use a particular line of credit in a responsible manner, the more positive impact it will have on your credit score.

4. If you check your credit score too often, your score will go down. The truth is that when you do a check on your own, it will only be a “soft” hit, and your score won’t be impacted. It is important that you monitor your score periodically.

5. Credit scores are affected by your age, sex and other personal non-monetary issues. This is a myth because federal law prohibits discrimination based on issues like race, national origin or sex. What matters are concerns related to income and debt, expenses and what your credit history is.

The area of credit scores can be tricky to navigate. I invite you to call or email me for an appointment so we can set these myths aside and be able to maximize your credit score.