10 common myths about credit reports and scores

This information is useful. Thank you.

On the other hand, when a creditor or lender pulls your credit report for the purpose of extending you credit or a loan, it’s a “hard inquiry” and may negatively impact your credit score.

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Another hard inquiries are Apartments... and hard inquiries stay on your credit report for 3 (could be longer) years and can negatively impact your score if you have too many of them..

VERY STUPID GAME .................

Having several credit cards with no balance is viewed as a risk. A lender will look at what you have availible to you and if you have any history at all of maxing out an account, then having several accounts that could POTENTIALLY be maxed out is viewed as a liability.

I believe the whole credit scoring system is nothing but a sham - so the fact that you have NO credit cards, but manage to save some money -and pay all your monthly expenses just fine, means your a bad risk - but you can be hip deep in credit card bills, installment loans, filed bankruptcy, but have absoltuely no money in savings - this actually means your a better credit risk and better at money management - no your just paying awhole lot of interest to them - so therefore they like it and they'll gladly give you more - my familys philosophy has always been don't buy it if you can't pay cash for it - same for credit cards - unless you can pay that card off every month than don't use it -

Paul - I appreciate your skepticism, but I can assure you that I'm not making these myths up. I've worked in the financial services industry for many years and am one of the founding members of a credit and personal finance website. We work closely with the credit bureaus every single day, as well as the folks who are responsible for credit scores.

jeromedouglas@yahoo.com - We're able to provide our users with a free credit report and score through our special partnerships, as well as the additional products and services we offer at a low cost. If you have any other questions about Quizzle, feel free to contact us at feedback[at]quizzle[dot]com.

credit cards I don't use them!

This nonsense is why we had the banking/finance/economy flop, easy money. Myth 7, your savings, says more about your ability to repay credit debt. Can you say secured loan! Obviously, a hard credit check by Freddie and Fanny did not impact the credit of all the sub-prime borrowers making a down payment with a bridge loan. Summer livin', Go to the store, Baby needs a new pair a shoes, bail-out $$$, and now...govt option health-care!

Another myth to keep in mind is that there are people who actually know whether an action will raise or lower your score. If you read the actual words of this article, the author leaves many clues that she is writing from a position of ignorance and doesn't really know what she is writing about. Note the frequent use of the qualifiers "may", "shouldn't", "can", "suggests". If the article was being written from a position of knowledge, the words used would be "will", "won't", "does", etc.

Don't trust your financial life to people who don't know.

I believe the worst is yet to happen. Companies like Macy's , Sears , and so on are all spiking their APRs, some nearing 30%. This is very bad to do in this time of economic fallout. Circuit City lost out to Best Buy, Office Depot lost to Office Max...Whose next LOWE'S or Home Depot!!! What are all these companies gonna do after everybody crawls out from under all this credit card debt and cuts their cards in half.I personally am not worried about a credit rating or score. It's not going to matter in a few more years anyways.

This is super helpful - Thanks for clearing up a lot of the misinformation out there.

@joey - This article is right on about #1. When you check your credit report for your own knowledge and it's not a part of applying for a credit card or loan, it will not affect your credit score. If your credit score got hit because you checked your own report, you should definitely file a dispute with the credit bureau. That shouldn't have happened and would be in violation of the Fair Credit Reporting Act.

I no longer have any interest in credit reports they ding you for this ding you for that ding ding ding and triple ding just a way to make more money from us Im 60 yrs old own my house and cars soooooooo TO HELL with credit scores Its all a banking game

... I especially like number 3 .... NOW it is not good to close credit cards ..... miraculously this has changed .... I have no open accounts , and no credit cards , and no debt .... hasn't changed my borrowing options ..... these articles are like the " new " diet of the day.

This article doesn't cover the most insidious part of credit scores. The credit reporting companies red line. I have been an underwriter in the mortgage industry for 22 years and can tell you this for a fact. I've encountered this too many times to be merely anectdotal but here goes. People who live in working class neighborhoods have lower credit scores than those who don't, often with the same credit history. Lower by 100 to 150 points which is a lot. Black, Hispanic, Asian and Whites who live in lower class areas are the most severely hit, it's the same as insurance risk used to be determined. If there is any ONE entity that can be held responsible for the sub-prime mortgage debacle, it is the credit scoring industry. How does a 3 digit score factor how one is going to pay off debt when human character cannot accounted for by algorithms? How the sales staff at Fair Isaac and Company (the founders of FICO scoring) convinced anyone they could predict how credit worthy a person would be by the score is the biggest accomplishment of "snake oil salesmen" in the history of man. So then by turning around and offering people credit at usurous rates in punishment for having low credit scores helped no one, even the lenders because they end up having to foreclose on real property or reposses personal property obtained under such difficult terms. In my opinion, we would be better off without credit scores. Seriously, there needs to be a few good class action law suits against Experian, Equifax and Trans Union with huge judgements against those companies, putting these people out of business for the trouble they have caused.

... and would be in violation of the Fair Credit Reporting Act.
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Which doesn't matter a bit, because the Fair Credit Reporting Act doesn't cover the "elements of fact, myth, and mystery" that comprise a FICO score. That is why I point out that people who write these articles are attempting to blow smoke into your skivvies. The "facts" behind a FICO score are closely guarded trade secrets. While some general "pay your bills, be on time" is common sense, when a person claims to know "10 common myths about credit reports and scores" yet fills the article with weasel words, I can only hope the editor didn't pay too much for this lack of expertise.

you know what a shame. when you find something wrong on your credit report. It will always get put back on. The credit reporting companys
say it your creditor and your creditor said it was reporting compay that reported it and they corrected your file. and even if you get a credit lawyer it will always come back the day after you pay your bill off.

"Creditors and lenders often consider people with no debt and no credit cards a higher risk than those who have credit cards and have proven that they’re able to manage their debt responsibly."

Wow!!!, are you kidding me? Someone has got this reversed..

The bottom line is, you do not need a credit card to build your credit score..buying a brand new car or buying a house will build your credit much faster than any credit card can do..

Those with a credit card will create a faster debt than using a debit card..

Your credit score is an "I LOVE DEBT SCORE". Go to myfico.coma and you can see for yourself.

You can get a home loan without having a credit score, it is called manual underwriting. There are some loan companies out there that are not lazy, how do you think they used to give out loans before the advent of the FICO score and the internet?

If you are buying everything with cash who cares if they won't lend you money!! I am on the Dave Ramsey plan, debt free in summer of 2012!!

Using credit cards, paying the minimum, using "convenience checks is ''''''dancing with the Devil"""""

In these bad financial times it is not right that car insurance use your credit scores to determan your driving abililty and set there rates. I think the two are unrelated