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The Myths about Credit Reports and FICO Scores

By: Tymon Hytem

As Americans, our credit history (and FICO score) is the single biggest indicator of how our financial futures will progress in the short term - much more so than any other financial indicator or ratio assigned to our financial lives.  It is not surprising then with three national credit bureaus reporting, and the importance placed on a credit score in our society, that there are bound to be many misconceptions or “myths” surrounding the FICO score.  If you are thinking about repairing your credit to improve your credit rating or perhaps retaining a credit repair service to perform this task for you, it might be helpful to know about some of these common myths first!  These misconceptions are primarily about what can actually help a FICO score, and what may diminish or hurt a FICO score.  Let’s clear up a few now! 
The Myth:  You have only one credit score.  The Reality:  There are three major reporting bureaus for credit, so there are three credit scores. The scores can vary significantly between the three, so it is advisable to check with all three bureaus.
 
The Myth:  It will reduce or harm your credit score to check your own credit.  The Reality: It should not impact your credit score no matter how many times YOU check. However, be sure to check through FICO.com or the three credit bureaus only.   
The Myth:  Income, gender and age are factors in a credit score.  The Reality:  Many a financial advisor will happily explain that this information has no bearing on a credit score. Employment is listed on the report, but does not have an effect on the credit score and is informational only.
 
The Myth:  The higher the salary, the better (or higher) the FICO score.  The Reality:  Net worth and income are not factors used in determining the credit score. Winning the lottery, an inheritance, or increased compensation and earnings will not improve a credit score. 
The Myth:  You may dispute information that is unfavorable and it can be instantly erased.  The Reality: Of course, you should dispute any item that is not accurate on your credit report. However, “questionable” credit repair services may make promises to erase unfavorable information from credit reports and instantly improve a credit score.  Disputing credit report inaccuracies is a process which takes time and diligence.  No unfavorable information becomes “immediately erased”.
 
The Myth: Searching for a loan damages a credit score.  The Reality:  Pre-approval or applying for a loan requires the potential lender to check credit worthiness, which will appear as an inquiry on your credit report. Although too many inquiries can reduce a credit score, searching for a car loan, home equity or mortgage won’t damage credit as long as these types of inquiries are made within 14 days or less of each other.  If these inquiries are completed within that time frame, they count as “one inquiry” on the credit history.
 The Myth:  Offers for credit cards can hurt a credit score.  The Reality:  Solicitations for credit cards have absolutely no effect on a credit score.
The Myth:  In marriage, credit scores or credit history are linked to one another.  The Reality: Bad or good credit belong to an individual independently. However, if there are joint accounts, then this credit information and activity will be reflected on both individual’s credit reports.
 If you are hoping to improve your credit score, which ultimately improves your credit worthiness, there are credit repair services that can assist you as well as “do it yourself” information available.  Never underestimate the power of a high FICO score and a strong credit report.  It is crucial for your long term financial health! 

Article Source: http://www.gcyarticles.com

Liv Worthington has worked in the credit and debt management field for many years. She takes pride in helping all of her clients find the Credit Repair Service. If you are in need of credit repair or debt assistance, then it is important to get on the right path towards a strong financial future and avoid Christian credit problems by finding the right credit or debt advisor to aid you in this process.

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