Like everything important in the world, credit reports also carry their own myths and misconceptions amongst the masses. These myths and misconceptions are either a result of ignorance or fear that the worst might happen to the individual’s finances.
If you also have worries about your credit report then it is likely that your worries incorporate some myths that are prevalent in the country today. The best way to deal with these myth fuelled worries is to become more aware about the misconceptions. Consider the following list of common myths pertaining to credit reports.
1. Clearing debts immediately gives results in the credit report:
The most common myth about credit reports is that clearing existing debts would result in the credit report becoming flawless. On the contrary, credit reports are a history of all your debt dealings in the past which means that records from before your clearance of the debt would stay within it.
However, while clearing existing debts would not result in the credit report becoming pristine it would result in considerable improvement in your credit score.
2. Credit counselling is bad for the credit report:
A very common misperception is that credit counselling is not good for the sanctity of a credit report. However, the truth is that there is no certainty on this. While a poorly handled debt management plan may result in your credit report suffering, proper dealings from your credit counsellor would not affect your credit report.
3. Checking one’s own credit report is counterproductive:
Another misconception is that if a person checks his credit report too often then it would result in his credit report suffering. In contrast, a person checking his own credit report is counted as a soft enquiry by credit bureaus, and only hard enquiries have the ability to affect the credit report negatively.
4. There is no need to check a credit report if everything is current:
Many people believe that a person who has been consistent with his credit payments need not check his credit report for discrepancies. However, this is not true because mistakes and errors apart from identity theft are serious dangers. This means that everyone should check their credit report regularly.
5. Removing credit cards would be good for your credit report:
As credit causes the credit report to suffer, people think that removing or cancelling credit cards is a good solution to boost credit score. Contrastingly, most lenders require one or two instances of credit on the credit report and consider this to be a positive.