Credit is one subject that will always be important, which is why this post is helping separate credit facts from fiction. No matter what your current financial situation is, you can use this information to become a credit master and strengthen your own score down the line.
When it comes to building credit, it can be difficult to tell fact from fiction. Use this short true-or-false quiz to help you get the facts straight and your credit in great shape!
Any debt will hurt my credit?
FALSE: An outstanding mortgage being paid on time isn’t the same as $30,000 worth of credit card debt. An outstanding mortgage that’s paid on time is considered, “good debt,” and it can raise your score. Stay away from consumer debt!
When I pay off my debt, it’ll disappear from my credit report.
FALSE: Paid debt will remain on your credit report for several years. If it was paid on time, it can boost your score. Bankruptcy, defaulted loans and other negative information can hurt, sticking around for 7-10 years.
Even though I got a promotion my credit score is unaffected.
TRUE: Income and job title may indirectly affect your score, but salary is not factored into your report. Still, head’s up – lenders may ask about your employment to determine how likely you are to pay your debts.
My spouse and I can run a joint credit report.
FALSE: Each individual receives their own credit score. Your joint accounts and shared loans may impact each of your scores, since they will appear on each of your reports.
Closing my paid-off credit cards isn’t going to help my credit score.
TRUE: It may pay to keep it open. Closing an unused card reduces your amount of credit and limits your credit history, which can sometimes lower your credit score. But if that credit card is tempting you to spend, close it!
Checking my own credit score won’t impact it.
TRUE: Running your own credit report does not negatively impact your score. When a lender checks for a mortgage, car loan or credit card application, it may lower your score a few points.
Get your free annual credit report at annualcreditreport.com. And check your credit score for free with Credit Karma, Credit Sesame, Credit.com, Equifax, Experian or Mint.
Even though the world seems on to be on pause right now, the situation will pass. When it does, you’ll be ready to view your credit situation with fresh eyes and come out stronger, no matter where you started. In the meantime, please know that we, at Lindo Realty Group, are here for you and your family during these challenging times. If there is anything we can do to help, do not hesitate to call us at 781-635-9022. Stay healthy!