There are a lot of myths around about what can and cannot affect your credit score, and this misinformation can lead to a lot of confusion amongst consumers especially when you are told the wrong thing by lenders.

Your credit score is important, as it reflects your financial history and is used by lenders when deciding whether or not to extend you credit, such as by issuing you with a credit card, so it is worth finding out which about credit scores are true and which are myths.

Three of the myths that are common are:

1) Checking your credit report can negatively affect your score It is often said that checking your own FICO report will somehow damage or negatively affect your score, but this myth comes from people confusing the sorts of searches that leaves on your report and those that do not. If a lender searches your report (e.g. if you have just put in an application for a new credit card and they want to see your credit history) this is considered a hard search and can lower your score by a few points per search. This therefore means you should be careful about putting in a lot of credit applications close together. However, a person checking their own report is a soft search and this will not have the same effect, leaving no trace on your record and will allow you to check for errors in the report.

2) Closing old accounts can improve your score This is not true, either. Once an account (such as a credit card) is opened, then the damage has already been done closing the account afterward will not have any beneficial effect on your credit score. In fact, it may even make matters worse for you, as closing down older lines of credit will make your credit history look shorter than it actually is which really does not help your position if you are trying to demonstrate that you are a good credit risk.

3) You should check more than your score with FICO As all three of the major credit scoring companies (Equifax, Experian and TransUnion) do FICO credit scores based on the same formula even though they each call in something different, which confuses the matter all you will need is the scores from these three bureaus.

Do check all three places as the information each one holds on you can vary (which therefore affects your credit score with them), but these FICO scores are all you will need. You can get all three scores in the same place by using myfico.com, however.

Do you want the facts about credit scores and reports in today's market . Mike will help you understand your credit card credit score quickly.

This entry was posted on Wednesday, March 3rd, 2010 at 10:51 am and is filed under Loans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.