Credit is a tricky prospect and there are quite a few myths and misunderstandings surrounding it. Whether you have good credit or need some improvement, often people do nothing with their credit simply because they do not know what to do or how to handle credit issues so it is favorable to them. There are a lot of myths and misunderstandings but with some education everyone can understand what is best for them.
- There are three credit reporting agencies that are used to create a FICO score. FICO stands for Fair, Isaac and Company, the entity that created the mathematical formula for calculating credit scores that companies use to determine credit worth of a person. The three agencies you should be aware of are Experian, TransUnion and Equifax.
- When you check your credit score online you may not be getting the FICO score. You should ask whether or not this is what you are getting so that you can determine if this is what creditors are looking at. If not, you may have an inflated score than what your credit actually is.
- Even if you are not getting your actual FICO score, you should still look at your credit score to get an idea if what it may be. This way you can see if you need to work to improve it or if your credit is favorable as it is. Even if the number is not exactly correct it will be in the ballpark.
- If you are receiving preapproved offers for credit cards in the mail, do not assume your credit score is good. First, you may just be approved for a small credit line and the credit company is taking their chances on you in order to garner more money from consumers. They are banking on multiple people accepting their offers and using them. Next, it is likely that you are not actually preapproved. The credit company reserves the right to check your credit again before issuing the card and they can even substitute the card you were offered with another with a higher interest rate.
- The credit reporting agencies are all automated which can sometimes be problematic especially if you have problems. If you have errors on your credit report because someone else’s credit shows up on yours you may have difficulty getting it removed permanently. This may occur because of similar names or similar social security numbers. The data gets mixed up and reported to the credit bureau. Even when disputing it you may find it comes back repeatedly.
- Check your credit for duplicate entries. This will look like multiple open accounts but it is possible that you simply have one open account that was sold once or multiple times. You can get these duplicate records deleted.
- You should do what you can yourself to dispute inaccuracies. However, if you continually argue with the credit agencies and you can get no relief it may be time to hire an attorney. The credit system works well in theory but it is highly automated and makes mistakes at times. If you dispute continually or get notices that errors were verified but are still inaccurate, an attorney may need to step in. Although this may cost you, your credit score is important and you will have a better chance of getting it removed permanently.
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- The Truth about Credit Scores
- Credit Inquiries Can Hurt your Credit Score
- Myth Busting: Marriage and Credit
- Are Credit Monitoring Services Worth the Expense?
- Why do you Need Good Credit?
- Bad Credit? Don’t Let it Ruin your Life
- What you Don’t Know About Credit Cards
- The Problem with Credit Card Disputes
- Top Ten Ways to Build and Maintain Good Credit
- How your Credit Report can Help you Avoid Identity Theft