Credit Myths

A low credit score can cost you in more ways than one.  Did you know your homeowners insurance premium is calculated based on your credit score, the same with your auto insurance.

   

What is looked at when creating your score?  Below is a chart showing what is considered during the scoring process.

The 5 Credit Mistakes

If you’re looking to improve your credit, you’ve probably heard many suggestions on how to go about it. 

 1. Paying off a debt will make your credit score jump up 40 points right away
This is not true. Here’s why: credit scores are calculated with so many different factors and values that it’s hard to say exactly how many points you can gain—or lose—by doing one thing. Every person’s situation is different. The fact is, there’s no one quick fix to perk up your score. Instead, doing things like paying on time…reducing your debts…and making sure your credit report is accurate are the recipe for a stronger credit score however if your negative information is deleted or removed  then the decision maker reviewing your file will look at your case more favorably. You or your customers do not have to wait 7 to 15 years our process takes only 3 to 6 months if the enrolled member is following all of our steps to success.  2. Checking your credit reports will lower your credit score
When you check your own credit report, it won’t affect your score. However, an inquiry will appear when a lender or creditor looks at your credit reports because you’re applying for a loan or credit. Keep those applications to a minimum and you’ll be in good shape3. Do old accounts improve your credit score if closed?
Not exactly true. The key word here is “old account.” When you close old accounts, you shorten your credit history. And that can actually lower or drop your credit score. If you want to close your accounts, be sure to start out with the newer accounts first. This will help keep your older established credit history on your credit reports.4. Will co-signing a loan make you responsible for the account?
Wrong. If you open a joint account or co-sign a loan, any activity on those accounts will show up on your credit report. For example, if you co-sign a car loan for your sibling and he/she misses a payment, that will show up on your credit report. Think of any joint account or co-signed loans as your own account. 5. Paying off a negative trade line or account will remove it from your credit report
Never. Negative records such as collection accounts, late payments and bankruptcies will stay on your credit report for 7-10 years—even if you pay it off.

For more information on credit and scoring visit my website or email me.  www.ezmtg4u.net   or bcorley@ezmtg4u.net