01.06.2014

There are many myths out there when it comes to credit scores. You have most likely heard at least some of them. No one really knows where they came from, but we do know they are myths. If you are unsure of what is a credit score myth and what is a credit score fact you should continue reading so you know fact from fiction.

One credit score myth is that you should never close a credit account. This is a myth because it is not always the case. There are times when this is what you want to do. Typically if you want to get a loan in the near future you do not want to close a credit account. However, if you have plenty of credit accounts, and you see no need for a loan in your future there is nothing wrong with closing one.

Credit Rating

Credit Rating (Photo credit: Match Financial)

Having tons of credit cards means you will not be able to get a loan is one myth that people think is true. At one point in time it was somewhat true. The fear was that you would go out and run up huge bills on those credit cards only to default and wind up in over your head. What has been noticed however, is that those who have been able to handle many credit cards for some time without issue will not just go out overnight and max out all of their cards. They have shown their responsibility by not keeping them maxed out, thus they are more trustworthy than once thought.

Another myth is that you do not need to worry about your credit score. This one is absolutely crazy! Of course you need to worry about your credit score! You credit score will determine what your loan rates will be or even if you can get a loan. Your credit score is very important and you need to pay attention to it. Remember the higher your credit score the better off you will be.

One rather strange myth is that you have to be in debt to have a good credit score. This is so not true. The thought behind this is that if you have a debt and are making your payments on time every month your credit score will go up. While that is true, you do not have to be in debt to have a good credit score. Say you have a credit card and make a purchase with it and then immediately pay it off. You do not have debt but it did help you build up your credit score.

Do not believe all that you hear when it comes to your credit. If you are unsure of something do your own research. You have the ability to find out for yourself if something is a myth or if it is a fact. The more you learn the better you will be able to separate credit score fact from fiction.