Common myths surrounding credit scores

There are several common myths surrounding credit scores that can be misleading.

Myth 1: Checking your credit score will lower it

One common myth is that checking your credit score will lower it. This is not true. When you check your own credit score, it is considered a "soft inquiry" and does not affect your score.

Myth 2: Having a lot of credit cards will lower your score

Another myth is that having a lot of credit cards will lower your score. In reality, it is the amount of debt you have in relation to your available credit that affects your score, not the number of cards you have.

Myth 3: Closing old credit accounts will improve your score

A third myth is that closing old credit accounts will improve your score. This can actually hurt your score by lowering your available credit and shortening your credit history.

Myth 4: Paying off a debt will immediately improve your score

A fourth myth is that paying off a debt will immediately improve your score. It is important to note that it may take some time for the credit bureaus to update your score after a debt is paid off.

It is important to understand these common myths to avoid making decisions that could negatively impact your credit score.

All courses were automatically generated using OpenAI's GPT-3. Your feedback helps us improve as we cannot manually review every course. Thank you!