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The Truth Behind 5 Popular Credit Report Myths

Posted on 2015-12-29 17:59:00

If you have ever taken out a loan or applied for a credit card, chances are good that you have a credit report with at least one of the three major credit bureaus—Equifax, Experian or TransUnion. Chances are also good that you’ve heard several myths about credit reports. Here we get to the truth about 5 common credit report myths. Happy ShopperMyth #1: Paying off a past-due item will remove it from your credit report.Truth: Late payments can remain on your credit report for up to seven years from the date of the missed payment. Making a payment will update your credit report to show you are now current on the account, but it will not remove the history of the late payment. Paying bills on time—every time—is key to a good credit score. Myth #2: Income and bank accounts are included on your credit report.Truth: Your credit report contains no record of your salary or financial accounts other than those used for credit. You can have a million dollars in the bank, and a late payment will still show up on your credit report and impact your credit score.

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Myth #3: You don’t need to worry about unpaid library fines and parking tickets.Truth: While it’s true libraries and police municipalities do not report directly to the credit bureaus, they may turn unpaid debts—even small ones—over to a collection agency. If that happens, the collection agency will almost certainly report the debt to one or more of the credit bureaus. Never brush off a debt just because it is small or not from a credit card company. Myth #4: If you pay your bills on time, there is no need to check your credit report.Truth: Credit reports have a high rate of errors, and those errors could affect your credit score. New information gets added to your credit report frequently as the companies you do business with report your credit history to the credit bureaus. A credit monitoring service makes it easy to keep tabs on your credit report by alerting you whenever there is a significant change that should be verified. Myth #5: Checking your own credit report can hurt your credit score.Truth: This one is our personal favorite. The truth is that checking your own credit report has absolutely no affect on your credit score. Zilch! If you use a credit monitor service such as MyFreeScoreNow, your credit report will be checked daily, and it will have no impact whatsoever on your credit score.

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