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10 facts you must know about your credit score!
Welcome to our video blog! In a recent video, we discussed how our lender friends at American Financial Network could help you, our client, with credit repair and restoration. Today, Monica and I wanted to cover the common truths and misconceptions about credit reports. We are offering an “Insider’s Guide” to your credit and in fact, we are going to play the “True or False” credit score game!
1. True or false: Credit scores are usually not accurate. True; 80% of credit reports have an error or an inaccuracy. This means you should regularly check your credit report!
2. True or false: Regularly pulling your personal credit report will lower your score. False; soft pulls done by yourself have no effect on your credit score. However hard inquiries done by lenders, possibly for loan approval, will have a negative effect on your credit score. The effect is minimal.
3. True or false: Higher income = higher credit score. False; income is not relevant to credit scores. Essentially, paying your bills on time is all that matters!
4. True or false: Credit reports and credit scores are the same. False; there are three major credit bureaus issuing reports. They are Equifax, Experian and TransUnion. Their scores as based on numerous factors and can vary. It is important that you make sure that the data being weighed from these three companies is accurate and the same.
5. True or false: Debt settlement removes debt from your credit report and fixes bad credit. False; debt settlement does not fix bad credit! Late payments and other negative information can remain on your report for up to seven years from the initial infraction date.
6. True or false: Cash only payments don’t improve your credit score. True; you can’t build good credit unless you use it and use it wisely! Optimally, you will have a few small loans and credit cards which you can pay off quickly and regularly to maximize your credit rating.
7. True or false: Closing your credit accounts will improve your credit score. False; closing your accounts lowers your disposable income to creditors. You never want to lower your credit utilization by cancelling credit cards!
8. True or false: Smart handling of your bank account will not reflect on your credit score. True; this data is not reported to the bureaus and has no impact on your credit score.
9. True or false: Disputing accurate, but negative, information is possible. False; you only have the ability to dispute mistakes. Valid disputes will result in the removal of inaccurate information from your credit report.
10. True or false: Missed payments not reported to credit bureaus won’t affect your credit score. False; any and all missed payments will eventually be reported provided you take care of the liability in a timely fashion.
As always, if you know someone in your social circle that is looking to buy or sell real estate, connect with us today. Remember, Monica makes it happen!
