Credit reporting, and credit in general, is one of the least understood but most important thing in a person’s life. If there is anything that can improve a person’s life with almost no effort, that is definitely to dispel these three common credit myths.
The first is that many people believe that paying their debts will make their credit report clean again. This is absolutely not the case. A credit report is not simply a view of your credit at a simple instance. Rather, it is a view of everything that has happened, both positive and negative, for the past seven to ten years, depending upon the type of record. Paying your debts will absolutely help to improve your credit, but if it is bad enough, there is no way to improve it in a single day or even year.
The second myth is that it is bad to request your credit. This, again, is not the case. All three of the major credit reporting agencies distinguish between “soft” and “hard” credit checks. Soft checks, which are not for the sake of giving out credit, do not injure your score at all. This means that you or any agency that you pay to monitor your credit can do say as many times as you wish, without hurting your score. Only “hard” pulls damage your credit, each one pinging it for a little bit.
The final very damaging belief is that a person does not need to check their credit if they pay their bills on time. This is absolutely not the case. Rather, everybody needs to check their credit report on a regular basis. Not only is there a large risk of identity theft, but these reports are extremely difficult to understand. Only too frequently do people do something that seems completely logical but later learn that it seriously hurts their credit. This is one reason why everybody needs to have a professional monitor their credit.
By: Hector Milla