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Credit Score Misconceptions

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Credit reports and scores have become an essential part of our daily lives since the 1980s when banks implemented a system to calculate consumers' creditworthiness. Today it is crucial to thoroughly understand your credit standing as a borrower. However, most consumers have very limited knowledge about what improves and hurts their credit scores. As a result, their rankings remain low as they struggle to make payments on balances with high interest rates. Below we have put together the top five misconceptions about credit scores.

1. There is only one credit score.
Contrary to this belief, there are several models to calculate credit scores. FICO is the name of the most popular model used by many lenders. The score range is from 300 to 850. The higher the score, the better is your standing as a borrower. Before applying for a credit, you can request your score from one of the companies. It will give you an idea what lenders will see when they pull your credit information. Keep in mind that scores from different companies may vary by …show more content…

It is important to understand that credit report is a history of how you have managed your credit over a period of time. As you clean up collection accounts, make on-time payments, lower or pay off balances, the adverse records will no longer dominate your credit report. As a result, your score and your creditworthiness will eventually improve. Keep in mind that collection accounts and other negative marks, such as debt settlement, foreclosure, and bankruptcy, remain on the report for seven to ten years. As long as these marks are valid, they cannot be deleted. In some situations, credit repair specialists can assist in removing derogatory records from credit reports. If you find a collection account that has been paid off a long time ago or a delinquent account that does not belong to you, contact CreditGlory.com for assistance with credit

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