The credit card has certain myth related to it, this article would help you to clear the misconception that innumerable people harbour. For the average people it is very difficult to understand this superfluous story related to it and the card issuer keeps a sealed lips regarding the credit card myth.
So these are few myths associated with the credit card.
Debt Consolidation – The Australian Lending Centre is a specialist in debt consolidation and a leading supplier of financial services including home loans, refinancing, personal loans, business loans, investment loans and debtor finance.
Loans Get Loans Fast! We have a great range of loans with lowest APR – apply now.
- Checking your credit hurts your credit score.
- The higher your income, the better your credit score.
- Closing a credit card will boost the credit score:
- All creditors and lenders use the same credit score to determine your credit-worthiness.
- There’s no need to check your credit report if you pay your bills on time.
- When you pay off a past-due account, it’s removed from your credit report.
- How you manage your checking, savings and investment account can affect your credit score.
- Paying cash for everything and not having any credit card debt will ensure a good credit score.
- Library fines, unpaid parking tickets and utility bills don’t affect your credit score.
- Debit cards and pre-paid credit cards can help you build credit.
When you pull your credit report for your own educational purposes, it’s considered a “soft inquiry” and it won’t affect your credit score. When a creditor pulls your credit report for the purpose of extending you a loan, it is termed as “hard inquiry” and may negatively affect your credit score.
Your income has no relation with your credit report. If you are financially stable that doesn’t necessarily mean you have good credit.
When you close a credit card account, you may be affecting your on utilization of credit. Credit utilization is all about how much credit you use compared to how much credit is available to you. When you close an account, you are lowering that denominator. The amount of credit that is available to you may an increase in the percentage of credit utilization. A higher credit utilization may negatively impact your credit score.
The truth is there are a lot of credit scores out there. And on top of the different credit scores that are available, there are different credit reports on which a credit score can be based.
It’s important to check your credit report regularly, make sure the information on your credit report is accurate. If you find a mistakes on your credit report then your credit score may suffer.
Negative informations like late payment fees & collection account it can stay on your credit record for up to 7 years from the date you have been a defaulter. Some chapter 7 bankruptcy can stay on your credit record for 10 long years from the date of filing.
The way you check, save and investments is your business might have an effect on your credit score. This information is not found on your credit report and so it doesn’t have an impact on your credit score.
Credit score can be affected if you do not use a credit card. Creditors and lenders think that people with no debt have higher risk than people who have credit cards. This is because they have proven that they can manage the resposibility of debt.
The library fines have impact your credit score. And more and more, utility companies are regularly reporting to credit bureaus.
Because debits cards and pre-paid credit cards are not considered an extension of credit, they don’t show up on your credit report. If you’re looking to build credit, using a secured or unsecured credit card responsibly is the best way to go.