There are many credit myths floating around the Internet regarding what positively or negatively impacts a persons credit score, but there are three that really stand out. I consider these three to be the top myths, because I tend to hear and read about them on such a regular basis. Well it's time to shed some light on the truth and shatter these top 3 credit myths. In addition, I'd like to quickly tell you about a very important free government credit report that you have available to you as well. Every person in the US is entitled to one free government credit report per 12 month period. Each of the three major credit bureaus is required, by law, to provide you a copy of your credit report for free. The only downside to the free credit report from the government is that you will not receive your credit score for free. *** FYI: Unless you opt to buy your credit score you will not be asked for your credit card information and this is not a free trial that you will be charged for down the road...It is an absolutely free credit report. It's very easy to get your report and in fact, as of this writing, I just accessed my free government credit report yesterday as part of my regular quarterly review. Even though you do not have access to your credit score for free you do get a complete copy of the rest of your report and can easily check for inaccurate information. It's important to note that when I say "free government credit report" it's not actually from the government, but it was a government mandate that each of the 3 major credit bureaus allow consumers a free annual copy of their reports. Top 3 Credit Myths Shattered: Myth #1: If I check my own credit report it will lower my score Credit Fact: Checking your credit report is a personal inquiry and is considered a "soft hit." It will not show on a credit report that any potential future lenders will see and in no way impacts your credit score. In fact, it's good practice to review your credit report regularly. A quarterly review should be sufficient. Myth #2: My score is the only thing that matters to lenders Credit Fact: There is much more to a lenders decision making process. There are typically many more important factors lenders use to determine your approval. I've found that lenders use a customers credit score once the approval has been given and it's time to determine the customers finance rate. This is the easiest and most consistent way to prevent claims of discrimination. Myth #3: Applying for new credit will lower my score Credit Fact: That may be true in some cases, like applying for multiple different credit cards, but if you are applying for an installment loan (mortgage, auto loan, etc.), any inquiries that you have, specifically for that installment loan, within a 14 day period will generally be counted as only one inquiry. If you actually open a new installment loan within 30 days, then any inquiries you had during that 30 day period would generally be counted as only one inquiry. The credit agencies understand that you are shopping for the best loan and no longer penalize you for this. Now that you know the truth about the top 3 credit myths, I'd highly recommend you review your credit report, whether paid for or with your free government credit report, clean up any discrepancies and dispute any inaccuracies...Doing so can literally save you thousands in future finance charges.
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