5 Credit Myths that May Be Hurting Scores

by Justin Weinger on October 17, 2016

Now that summer is over and we are enjoying the fall trees turning and the cooler weather move through, that can only mean one thing; winter is coming and another holiday spending season.  Spending never really ends, there is always something will want, so you need to set limits on yourself.  Any mortgage, loan, or credit card interest rate you have is driven by credit, so why not strive to have the best score.  Whether you have great credit or issues in the past, there are a few ways to raise your credit score now. Of course if all else fails, it never hurts to look into credit repair services.

Watch Credit Card Spending, even if Paying the Balance

A large portion of your credit score is based off credit balance compared to limit, so even if you are paying off the balance each month, watch maxing out your accounts.  Depending on the timing that credit bureaus are refreshing your credit each month, it could show a large balance, lowering your score drastically.  Sure paying off the balance each month can continue to raise credit limits, showing you are a responsible spender, but do not hurt yourself in the process.

Closing Old Credit Accounts

Even if you are not using a credit card account, it is better to keep it open instead of closing.  If you have other credit accounts with balances, closing can reduce your total available credit, lowering the margin between balance and limit.  If anything cut up the card, check the online statement every month to make sure there is no suspicious activity, and leave it open.

Checking Your Own Credit will not Hurt Scores

Speaking of suspicious activity, it is important to monitor your full credit report, so at least once a year you should take advantage of getting a free copy of your credit report from any of the credit bureaus, although the score itself may be an extra charge.  Pulling this report will not impact yourself negatively, and in fact if you are interested in your scores, most of the creditors are now including your FICO score in each monthly statement, or clickable on your online statement, so you can see exactly where you are month over month.

Using Cash for Spending Will Help Credit Rating

Using credit accounts is not bad, abusing them is, so paying with cash instead of credit is not helping scores.  If anything, pay with credit, and pay off the balance each month.

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