The media, newspapers, internet are full of information, but sadly, much of the information concerning credit is inaccurate. Let’s check out some common credit myths:
Credit Myth: “FRCA scores are locked in for six months, and they change every six months.” That's a total myth because actually, the FRCA score is based on the data that was available right then and there, exactly when your report was pulled. In other words, it's dynamic, and constantly changing. The calculation is recalculated every time that the credit score is pulled, so it's not good for any set length of time.
Credit reports for lending, depending upon the lender, sometimes have a period of time that the lender will utilize the same credit report without pulling it again.
Credit Myth: “I don't need to check my credit report if I pay my bills on time.” Believing this one can really hurt you! The reality is that nearly eighty percent of files contain errors, so whether you pay your bills on time or not, you do need to check your report for errors, as well as check your report for any potential identity theft. After all, these errors are usually the fault of either the data furnishers or the credit ratings agencies themselves, and in no way reflect your own financial discipline and responsibility.
Credit Myth: “Checking your own credit report harms your credit score.” Most everyone at one point has believed this myth, and more than likely you have as well. The thing is that most people do not realize the difference between a hard inquiry and a soft inquiry. A hard inquiry is one that is done by a lender to evaluate whether or not they want to give you new credit. That is the type of inquiry that will hurt your score; or that will affect your score. However, you yourself can pull your credit report as much as you want, and it won't affect your credit negatively at all. That’s a “soft inquiry,” and you can do this at any time without hurting your credit score!
Credit Myth: “Consolidating into a low interest credit card will increase your score.” Unfortunately, the interest rate of your cards has no effect on your score at all. This is because of the communication ecosystem that the Credit Ratings Agencies run: this is data that simply never gets passed along and thus never has a chance to affect your credit score either way.
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