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Credit Myths
MYTH: It is impossible/takes forever to dispute information on my credit file.
FACT: By law, the bureaus have only 30 days to complete an investigation on your credit file – all you have to do is request it!

MYTH: My bad credit will haunt me forever.
FACT: By law, negative information can only stay on your credit file for seven years (bankruptcies for 10 years). Also, the past 24 months are the most sensitive – older negative info will hurt your score less than more recent information.

MYTH: It doesn’t matter when I pay a collection, because as soon as I pay it, it will be removed from my credit report.
FACT: It’s best to pay a collection as soon as you’re aware of it. If you wait to pay a collection, the date will remain current affecting your score more severely. Also, paying it does not remove it – it will remain on your file as a paid collection, which is still a derogatory item.

MYTH: My score will drop if I apply for new credit (inquiries).
FACT: Inquiries are a very minimal part of your score calculation. Also, multiple inquiries from mortgage or auto lenders within a short period of time are typically treated as a single inquiry.

MYTH: It doesn’t matter how high my credit card balances are, as long as I make my payments on time.
FACT: Maxed-out credit cards are viewed as a negative item. Try to keep balances at or below 30% of your available credit.

MYTH: It’s a good idea to open up an account if I’m offered a discount at the store or 0% interest for a few years.
FACT: Opening up a new account through a finance company has a negative impact on your score. On top of this, it will likely be reported as a maxed-out revolving account – another negative factor!

MYTH: I should close out old accounts that I don’t really use anymore.
FACT: Those old accounts show nice long payment histories and add positively to your credit. Your score is based on both positive and negative credit. Keep them open and use them every six months or so just to keep them active.

MYTH: If I cosign on a loan, it won’t affect my credit.
FACT: By cosigning, you are signing on as a responsible party for that loan. It will affect your credit!

MYTH: Lenders will judge me based on my credit score alone.
FACT: While a credit score is an important factor, lenders also look at factors such as your debt, income and employment history.

MYTH: If I dispute my information with one bureau, they will send the updated info to the other two.
FACT: The bureaus don’t share information, so it’s up to you to contact all three bureaus.

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