10 Common Credit Report & Credit Score Myths

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Credit card cut into pieces

Credit has its fair share of myths, legends and misinformation. Pile on top the proprietary nature of credit scores, the formulas for which are closely guarded secrets, and navigating the credit waters becomes even more confusing.

Time to dispel some common myths about credit reports, credit scores and credit cards:

1. Pulling your credit report will hurt your credit score.

When you pull your credit report for your own educational purposes, it’s considered a “soft inquiry” and will NOT affect your credit score. On the other hand, when a creditor or lender pulls your credit report for the purpose of extending you credit or a loan, it’s a “hard inquiry” and may negatively impact your credit score. (Learn more about credit inquiries.)

[Free Resource: Check your free credit report and score]

2. Your income is factored into your credit score.

Your salary has nothing to do with your credit report and credit score. You may make a solid living, but that doesn’t necessarily mean you have good credit.

3. Closing a credit card account will help your credit score.

When you close a credit card account, you may be affecting your “credit utilization.” Credit utilization is simply how much credit you use (total of all balances) compared to how much credit is available to you (total of all credit limits). When you close an account, you’re lowering the amount of credit that’s available to you, which may increase your credit utilization percentage. A higher credit utilization may negatively impact your credit score, as it suggests to a creditor or lender that you’re a higher risk.

4. There’s only one credit score that all creditors and lenders use to determine your credit-worthiness.

The truth is there are a lot of credit scores out there. And on top of the different credit scores that are available, there are different credit reports on which a credit score can be based.

5. If you pay all your bills on time, there’s no need to check your credit report.

It’s important to check your credit report regularly no matter what your situation to make sure the information on your credit report is accurate. Mistakes are made, inaccurate information is reported and if you’re not on top of it, your credit score may suffer.

Check your credit at least every six months at free websites like Quizzle.com. You’ll get a free credit report and free credit score, plus the ability to dispute inaccuracies easily and online.

6. Paying off a past-due account will remove that item from your credit report.

Negative information – like late payments and collections – can stay on your credit report for up to seven years from the date of the initial missed payment. Some bankruptcies can stay on your credit report for up to 10 years from the date the bankruptcy was filed.

When you pay off an account that was previously past due, your credit report will be updated to reflect that you’re current on the account. And as time goes on, the negative information will have less of an effect on your credit score. However, as the purpose of a credit report is to keep a tally of your credit history and how reliably you’ve managed your credit, that information will stay put for seven years in most cases.

7. Your checking, savings and investment accounts impact your credit score.

Checking, savings and investments do not show up on your credit report unless perhaps you are delinquent with a payment or past due on monies owed.

8. Paying cash for everything and not having any credit card debt will ensure a good credit score.

Never using credit can actually hurt your credit score. Creditors and lenders often consider people with no debt and no credit cards a higher risk than those who have credit cards and have proven that they’re able to manage their debt responsibly.

9. Small debts like library fines, unpaid parking tickets and utility bills don’t affect your credit score.

It’s not uncommon for libraries to turn over even small unpaid debts to collections agencies, which can wind up on your credit report and significantly impact your credit score. And more and more, utility companies are regularly reporting to credit bureaus.

[Free Resource: Check your free credit report and score]

10. Debit cards and pre-paid credit cards can help you build credit.

Because debits cards and pre-paid credit cards are essentially electronic checks and not an extension of credit, they don’t show up on your credit report. If you’re looking to build credit, using a secured or unsecured credit card responsibly is the best way to go.

Photo Credit: http://www.flickr.com/photos/baptistefranchina/ / CC BY-NC-SA 2.0

  • http://www.PixonDVD.com Josh

    Although #9 is important, in most states anything less than $25.00 will not be handed over to a collection agency, thus will not have a negative score on your credit.

  • Chris

    After you payoff a collection how soon will it come off you score? How will it impact you credit score?

  • http://www.quizzle.com Ann-Marie Murphy

    A collection will stay on your credit report for seven years from the initial missed payment that led to the collection. Unfortunately, a collection is considered a serious delinquency and will likely have a significant negative impact on your credit score. As time goes on, however, the collection you’ve paid off will affect your score less and less. Keep paying all of your bills on time to demonstrate that you can be responsible with your credit – and be patient. In time, if you consistently demonstrate smart credit management, your credit score will rebound.

  • Dought

    Wonderful read, thanks. It’s much easier to understand now what a credit report is really about and how it is important. Even if you are not in debt, keeping a well cared for credit score is vitally important.

  • Jennifer

    As to #10, there are some prepaid credit cards such as AccountNow that will report to a credit bureau and they have bill pay which they report if you pay your bills on time.

  • Julie

    So how does paying rent every month factor in? It’s not anything with a “credit”. Can you build credit by paying rent on time, and also hurt your credit by not paying on time? or is that only if yoru landlord reports you to a credit bureau?

  • Mel

    I think that if you pay rent through a company – such as a property management group, then it would be reported. But I’m not certain. However, I’m pretty confident that if you pay rent to a private individual it will not be part of your score.

  • mike

    Ummmm, no renting doesn’t go on your credit. It’s not a loan. There’s no credit. Rent is just pay as you go. You were never extended any credit. No, no company that rents to you reports anything to a credit bureau. It’s not a loan.

  • Shirley

    Your rent record won’t be reported as long as you are current, but the landlord can report delinquencies. And if you move out and have past due rent, that can be reported.
    As well as eviction notices. Court judgements are reported.

  • Peggy

    When you pay your rent always pay with a check(keep front and back of them) and/or thru online banking so you have easy access to proof payment if you are looking to get a mortgage in the future this helps being you won’t have to hunt down the landlord for a rent history letter, as mortage companies and banks don’t like and accept the cash receipts without verification from the landlord. Even if you share an apartment, pay your part to the landlord directly out of your persoanl account. The only time a a landlord will report is if he has to get a judgement against you

  • Ken

    I have found that getting too many credit cards can actualy lower your credit score by decreasing your “average age” of your credit lines. In this case, only time, (and not opening any new accounts) will increase your average age, and eventualy boost your overall score.

  • http://www.chicagopiattorney.com Jason Rubens

    Good information. I agree that you need to check your own report frequently and dispute anything that is inaccurate. Pay your bills on time and pay down your debt and your credit score will increase.

  • louis

    how long after chapter 7 before you can get a loan

  • http://quizzle trevor

    is a 681 a bad score?

  • eddiefl

    On the issue of paying rent and your credit, rent is usually not reported to the Big 3 credit bureaus HOWEVER….depending on your state/city, it CAN and WILL be reported to a company called TRG. (Tenant Reference Guide) which is set up and funded by the landlords and property management companies. TRG can tell a prospect landlord if you are a good rental risk, if you have paid your rent in the past or if you still owe any landlord money. TRG (which may be called something else depending on where you live) is similar to Chexsystems that the banks use to qualify you for a bank account. If you have a bounced check, you are likely already in Chexsystems. An unpaid NSF stays on there for 5 years.

  • rhonda

    Many, many years ago, I had to move out of an apartment I rented in Ohio because the person renting it with me left. I couldn’t afford it and the apartment complex would let me out of my lease early. I was going to get evicted eventually anyway so I moved out. It did show up on my credit.

  • rhonda

    The apartment complex would NOT let me out of the lease early (sorry, I made a typo previously).

  • Thomas

    I am a landlord. I do not report anything to a CB unless it is bad. Due to the fact that I am not extending credit to any of the tennants, they pay to live there. That’s all. If they were to leave and break the lease, I would report it. Also if they tear up the place and I get a judgement against them in court, I would report it. These things are meant to keep people honest, not to hurt them. As long as they pay the judgement, it would actually help them in the long run.

  • todd

    i have a auto repo on my credit due to cosinging 4 a family memmber that didnt pay there payments and hold up there end of the deal im in a program to clear and pay off my debt in full how long will it stay on my credit befor it comes off and when will my score go up or will it even go up i rent from a relastate company will that in prove my score if its payed ever month on time witch my rent is ontime every were iv lived well thanks if u can anser these ? i would like that

  • chuck

    we will be selling a home this summer on a short sale or a forclousure in lew. how will it affect our credit score?

  • http://Quizzle Kristen

    For Trevor with the 681 score. I had 688 and my boyfriend had 681 and we still qualified to buy a house. By myself, $115k but with us together, we qualified for a $140k house. Getting the house bumped my credit score way up past 780 too.

  • jeremy plank

    credit scores are a joke,its a way for the banks to judge on people, the banks dont wanna admit that the real revenue the get is from the middle class man who goes paycheck to paycheck but still does all the things his family expects…they call that your finance rate..rich people have good credit because of the income or the bank account..normal people get scrutinized because we work 60 hrs a week and make less than 30,000 a year

  • http://blog.quizzle.com CocoTe

    agree + w/ jeremy ;Credit scores are all a BIG JOKE
    my wife can walk into any Car dealer and buy a Brand new car and she doesn’t even WORK
    while I’ve been working and paying all our bills I didn’t have enough credit for a Laptop while she has amassed over
    $40 K in available credit…RIDICUOSLY

  • Chris

    Refuse to worship at the alter of the great FICO all a credit score is, is an “I LOVE DEBT SCORE.” If you pay cash for everything you don’t need a credit score. Credit is what has put America in the hole we are in today. Let’s get back to doing things the way our great grandparents did things. If we decide we want something, then we save the money and go buy it. Cash is king, debt is dumb, and the paid off home mortgage has taken the place of the BMW as the status symbol of choice.

  • http://BuildersChoiceBlinds.com Rudy

    Chris is obviously a “Ramsey” listener. Way to go Chris!!

  • Sara

    I heart Dave Ramsey

  • Collin

    I am an avid Dave Ramsey fan as well. Chris put it well. Dave could walk into an apartment complex to rent a place (not that he would) and he would be denied because he has ZERO credit, yet he could walk into the home office of the complex and buy the entire complex in cash…sounds like the FICO score is worthless to me. I don’t love debt, and I don’t love FICO…my score is falling and I couldn’t be happier. in a few years, I will have a ZERO FICO score…

  • Laura

    used to be that credit wasn’t an issue. If you wanted an apartment, you paid the money and moved in. Same with a car. This, credit check everyone for everything is ridiculous.

    The thing I find the worst. Credit checks for employment. Pointless. What does your credit have to do with what kind of employee you’ll make? It doesn’t. Just because you may have bad credit by no means indicates that you’ll be a bad employee. It tells the employer nothing. It also doesn’t mean you can’t have a job handling money. It may not be your fault entirely that your credit is bad. Furthermore, it is none of the company’s business what your credit is.

  • Lenore

    I would never agree to a credit check from an employer. That’s personal business and in no way indicates what kind of employee I am. Honestly, I’m surprised that anyone allows a credit check from their employer. Am I married to my job? No. Do they pay my bills? No. They pay for the services I render and thus have no need to know anything about how I spend or previously spent my money.

  • Melissa

    I agree that life would be better to just pay cash for everything and not use credit. But that’s not always the best.

    What does a person do in case of emergency? What if your fridge keels over (even though it’s only 5 yrs old, but definitely past warranty) and you don’t have any cash on hand and have no way to get the money in the near future?

    It might be easy for someone who makes good money to say, “We should all just pay cash for everything” but what about those people who would have to save literally forever just to buy a crappy car? Believe me, I hate credit more than almost anything, but if I resorted to paying cash for everything I wouldn’t have a car, I’d probably be dead or really ill because I couldn’t afford the doctor, I wouldn’t have a house or any appliances or furniture…I’d be screwed.

    I just think that the way they rate credit is awful. Just because someone has a lot of credit cards, but pays them every month doesn’t mean that person is responsible! It just means that the person makes more money! I think responsibility is the person who has only a few open lines of credit and pays every month on time. I also think that certain companies or places should report on your credit that you paid the bill on time – not just when you fail to pay it. Utility companies for example or doctor’s clinics or hospitals. I also think that they should make classes available for the credit challenged and by taking the class and passing, you can raise your credit score a little.

    I’m also ticked because my husband’s score is higher than mine – but if it weren’t for me, his would be horrible. I pay all the bills on time. He has no idea when they’re due! Ugh. The whole system is just stupid.

  • Nancy

    I had a 821 credit score… then I got sick. Right before I went into the hospital I made a $49 purchase from one local department store and a $70 at another. Since I was alone, when I was in and out of the hospital, I had no one to pay bills or over see my finances. My regular mortgage, car pmt/insurance and utility bills have always been automatically paid on-line.

    On and off for the past year, I had to stay with family, in another state, until I was well enough to stay by myself. The $49 purchase has now turned into an over $400 one and the $70 almost the same due to late fees and finance charges. Right now, if I wanted/needed credit of any type, I would be SOL. Creditors just look at the current stuff and do not look at all the years my credit was perfect – definitely, NOT RIGHT! and collection agencies don’t care why you owe the amount and you no longer can talk to the stores. I don’t want to pay the additional charges, but it really doesn’t matter if I do or not at this point, because it already shows up as months past due. I’m treated the same as those who spend indescrimnatily and don’t care about credit card debt.
    I agree – the ‘System’ is just wrong!

  • Crystal

    I personally have bad credit. But in all actuallity it’s not my fault. There are a few ER bills that I couldn’t pay, but other than that I only have two things on there. A mortgage and a car note. Which my ex-husband specifically requested in the divorce. Then low and behold 3 months later the car is repoed and the house is foreclosed on. And my credit is now 581 -_- Tell me how that is fair in the least.

  • Brian

    I have heard it said that you are not sucessful until you owe a million dollars. I have been in that position many times. I also heard that other peoples’ talents and other peoples’ money is how to get there. I have hired many talented people. They were paid well and I have propered as a result. Credit is a tool. Use it to your advantage. I could not afford to pay these talented people in the early stages. Sombody elses’ talent. Or to make any money unless I owed it. Somebody elses’ money. I have used both and we have all prospered. Build your credit score, hire smart people and borrow money to build your future. As Forest Gump says, “And that’s all I have to say about that.”

  • Scott

    We stopped using CCs 5 years ago. We closed all my credit accounts almost 4 years ago. I paid off my loans and credit cards. I am now working on paying off my mtg.

    My goal is to have a zero credit score!

    Folks, pay cash for everything. You will spend less and save more. And not having bills at the end of the month is a liberating feeling. You can travel, rent cars, and do everything with cash, checks, and a debit card.

    A credit score is not a sign of success. It’s an I love debt score.

  • Sabine

    In regard to number 8, we have no mortgage, car payments, and pay our credit cards in full every month. When I wanted to get a new car with zero interest I was told I couldn’t qualify because I don’t have a credit history. I finally used a credit card to get 10k at 2.99% until the balance is paid off so that I can establish credit. I think that if you pay your bills in full every month and have no other debt you should be considered a good credit risk. The system is ridiculous when I can’t qualify for a great rate because I pay our bills in full and on time every month, we don’t have a mortgage and our cars are paid for. My credit score is only 750 because I don’t have a history for a revolving account. We use credit cards for the cash back we get every year and I do feel better having a credit card in case of emergency and when traveling.

  • K

    You can be a rebel if you want, but that is an expensive choice…If on the other hand you find out the rules & make them work in YOUR favor, you can be a winner! During the time when they were giving away credit opportunities, I took them by transferring a balance, most of the time for zero %, which is still available (Google zero % credit cards), but today can come with transfer fees that are 5% verses 3% before. If used for a car, like I did, it is still the cheaper bargain – at one point I bought a Cadillac for 0% interest with a credit card check (you can’t just use the card for that) for 15.00 per month (with MBNA now sold to B of A) for the first year! And you thought Cadillacs were expensive!!! After that I did balance transfers till paid. You can’t beat that!

    My advice – learn the rules & follow the system, when you do anything else, & later need emergency money, you won’t have it or be able to get it. Credit cards are like an accessible savings account (that must be replenished eventually) used properly.

    On the back of every credit card is a customer service # – use it & ask every question about your account like APR for purchase, APR for cash out, etc. APR will vary for the different uses – get savvy! APR sometimes come with a START rate that expires later – Beware! Whatever you do – Don’t bite the hand that can feed! Shop rates, then transfer your balances to build credit & get off your high APR’s. Learn to calulate, have customer service walk you though it.

    Oh, & put a mini post it with all the details of what that card is offering on the back of each card, as they can all vary. Yes, it will take time, but can be a financial lifesaver. Put end dates on your computer calendar warning you 1 month ahead that a rate is expiring.

    If you do have to accumulate debt, don’t use it for non-essentials & obviously pay it back asap. If you do have to use it for emergencies – take an extra job later need be to pay off the extra or rent a room, garage, or sell something anything to make this as painless as possible – life is never without some pain! But at least use it to your advantage to build your score & when you go to buy real estate especially, you can save 100-300k in interest on an average home because of good credit!!! You will save 2-5k on an average car! Now, is THAT worth it?

  • Felicia

    As far as Laura and Lenore’s comments regarding credit history and employment, the two are very closely connected. If you work in an industry where you will have access to sensitive information and your credit is below standards, you may be at greater risk to steal or sell sensitive information to get out of debt or to get something you can’t normally afford. It is not a personal matter it is a matter for the public, if they are to trust you with their sensitive information. I am a Financial Banker. Would you trust me with your information, if I was a poor manager of my finances? The bank has already insured that this is not a question you have to consider by checking my credit history. I personally want to know that the person, who touches information that could potentially harm me if it feel in the wrong hands, has been closely checked and is financially sound. This includes teachers, cashiers, people who will fix my property and any place where my ssn is used. It is irresponsible for a business to hire anyone that is not using good financial judgement. I am not saying perfect credit but decent credit. This may be harsh, but it is reality. I have never seen a person without credit not hired. I am a total Dave Ramsey fan and am on the road to being debt free, so please do not think I push people to get or acquire credit. I teach classes to get others out of debt for a non profit. Poor credit will and needs to affect more than your ability to buy things in order for it to make some people try to clean it up.

  • laura

    Felicia may be right, but there are times when it truly is not the individual’s fault that they have a low fico score. My own situation is a case in point. I became ill in ’03, needed a kidney transplant, couldn’t work. it took 2 years to get ssdi. I had zero income during that time. my house was forclosed, i lived in it for those 2 yrs. I then had to claim bankruptcy or I would owe$311,000 to the mortgage company. now i have no credit cards, can’t get one. it will take 10+ yrs to clear my credit report. i now only use cash. its a catch 22 really. i don’t want credit cards but need them to improve my score. It happens all the time. god forbid you get sick……you may end up like me and lose everything. it does suck! I don’t believe there was anything I could have done to prevent my current situation. How can you plan for an event such as this!? so i am just sol.

  • Joan Steawart

    Unfortunately, even when the information in your credit report is erroneous…meaning you did not incur that account and/or it was paid in full, or closed by the consumer rather than the creditor…it can take years for Equifax,Experian and Transunion to actually correct the error…in the event you decide to take your case directly to the FCC regarding the rotten practices of the credit bureau…expect more delays..however persistence pays off even with the IRS…trust me…i’ve been policing my own report for the past 7 years…and while errors go on in an instant…it is not removed that quickly…so i encourage everyone to police their own records…

  • Rae

    You do want to have good credit even if you don’t plan to use it. If you lose your job, savings, and amass huge hospital bills, you will NEED that credit!

  • Deb

    Like it or not, to the person who said he would never allow an employer to check his/her credit, credit shows an employer how honest you are, “worthy” if you will. Especially if you handle sums of cash in a retail environment. Insurance companies ( auto ) base your insurance rate on your credit score. Alot of things are based on your credit score. It shows how responsible a person you are. Yes, there are circumstances none of us can help. As a cancer patient, I lost my job, and went from a five figure income to a very low disability income with two small children. I had to claim bankruptcy to keep my home. ( chapter 13) However, if you don’t overextend yourself and watch your score, you should have no problem. I used to have every platinum card they made. Now, I pay cash even for cars. They are used, but they run. My mortgage is paid on time and I am out of debt .Like it or not, credit scores say alot about you, that is why its so important to make sure its accurate before you go for a job or insurance and find out its totally messed up. (That happened to me too, and its not fun) Just a friendly bit of advice.

  • BungalowMo

    To all those Dave Ramsey “worshipers”…get real. He can afford to pay cash for everything because the guy is a millionaire.

    The rest of us working stiffs…take care of your credit & get cards that pay YOU! I only have cards that give me something back & pay them in full every month. Every few months I get $25 checks & use them for whatever I like. I have a card that gives me 0% int for a full year on any automotive purchase (GREAT for emergencies!!) and several others that give me points towards gift cards.

    SO…getting something in return beats paying cash every time!! And, it got me my house!

    Go ahead & pretend you don’t need a FICO score. Then try to qualify for a mortgage.

  • BungalowMo

    Felicia’s comment: If you work in an industry where you will have access to sensitive information and your credit is below standards, you may be at greater risk to steal or sell sensitive information to get out of debt or to get something you can’t normally afford….

    Is a great one!! I currently work at a secure Government facility. They did an extensive BG check including Criminal, Civil & Credit. If your job pays 50k per year, but you are in debt in excess of (for instance) 150k, not including any mortgage & your credit is maxed out… you may possibly be denied a security clearance. People in situations like that are living beyond their means, in debt up to their eyeballs & may be considered a risk with classified information.

    In cases like this….yes, I agree that everything should be checked. They even went to my old neighborhoods & spoke with old neighbors as to my character.

  • Personal Finance Advisers

    You can be a rebel if you want, but that is an expensive choice…If on the other hand you find out the rules & make them work in YOUR favor, you can be a winner! During the time when they were giving away credit opportunities, I took them by transferring a balance,
    Like it or not, to the person who said he would never allow an employer to check his/her credit, credit shows an employer how honest you are, “worthy” if you will

  • Jenny

    FICO scores are important, but they do not tell the whole story.

  • cw

    so what does the F in FICO stand for? Shouldnt the second letter be a U instead of an I?

  • cw

    I only use credit cards as a 30 day tool while collecting interest on the money and paying the balances. I own 3 houses 2 of them free and clear. For some reason this negatively affects my score. It’s really not a big concern as I have already been down the road of high debt and loosing my income and dont plan to return so I really could care less what “Fair” Issac has to say about me. If you dont have the money then dont spend it. That’s what this society has lost and is suffering as a result.

  • cw

    For those people who believe it is impossible to live without credit unless you are rich……. I make very little money but lived like a pauper in an old ram-shackled home for many years but bought this place with very little money in a growing area. After 10 years of improving someone finally came along and made an offer I couldnt refuse. I then took this cash and bought 3 ram-shackled properties mostly with cash instead of buying expensive cars and furniture. Regardless of what the real estate market does I paid low enough that I can guarantee myself a reasonable retirement and can now afford to relax and do what I like and no I am not a landlord. No I do not own a boat and no I do not own a flashy new car. Life is much more rewarding when you can do what you want instead of pursuing status symbols. When I need a car I go to the dealers auction and buy 2 and sell 1. I get furniture second hand and anything else I wait for a reasonable price or go to the knock off stores or wholesale clubs or simply do without. I have learned all these lessons from people that were rich and got that way themselves by being frugal and not from their parents or the lotttery or something like that. I think they have found that most lottery winners squander it all away within a few years. Happiness is living life free from shackles and debt is a big chain around your whole life.

  • DENIECE

    MY question is I have a credit card now I like to know if I should request for a settlement
    or pay on it every month, until it’s paid off.

  • Debby

    I am glad to see quite of few intelligent people on here that see the FICO score for what it is. It is not a tell all about anybody that’s for sure.
    Very responsible people are being turned down while irresponsible people (before the credit act: a lot of college kids!) are being granted credit.

    Paying with cash is an excellent program but since society screams that we HAVE to have credit then pay cash with credit. If you can find a rewards card, either that pays cash back or a percentage to something else, then use it to purchase your BUDGETED amounts, groceries, car payment, utilities BUT besure you budget so you don’t get caught in the buy now pay later. This system is a use card NOW, pay NOW!!

    Example: I made $1000′s worth of purchases, each purchase is subtrated out of my checking account book as if I used my bank, then I add them all up and send that amount to the credit card. I get 1% cash on all my purchases, don’t pay interest to the card and am still using my credit card but be very sure that you send in your “payment” BEFORE the end of the statement so that the amount that is sent to your credit report is low or nothing, no high balance, which is usually done when they close out the current statement.

    This information was information that I garnered from reading many “about your credit report” articles. Keep reading and stay informed!!!

  • Tiffany

    Since most things stay on your credit for 7 years then “drop off”, what happens to your credit score when that happens?

  • MamaMia

    when paying off debt… is it better to the debt off as a lump some or make payments?

  • tina

    I applied for a loan and got it when the bank checked my credit score when I was applying for the loan it was 803, once the loan hit me credit report my score dropped to 639..why the only other debt I have is my mortgage which currently has a balance of 28,000 the loan was for 20,000.00…but is now down to 17,000.00. Should I have put the loan in both my name and my husbands I worked very hard to get score that high very upset it dropped so low can you explain and can I fix it Thanks

    • http://www.dawnsinteriordecorsolutions.com/ dawn

      Credit scores always drop when you apply for a loan, especially a sizeable loan. Reason being, your income to debt ratio changes. Anytime you increase your debt your credit score drops, however, this is usually only temporary. By paying your loan responsibly like you have been doing your bills that got you the great score, in no time your score will climb right back up where it was if not higher.

  • Kelly

    number 6 is almost always true. I have gotten everything negative removed from my credit report(after I paid it). I understand that this is unusal. To do so, I had to contact every company on my credit report, pay them, and ask them to remove it. They aren’t required to and generally wont unless you have a good reason. when i paid some of them, they were still showing up as ‘paid’, but of course that i had payed them late. Also, you can get a note put onto your account if they won’t remove it, by disputing the information with the bureus, and having them add a note that explains why it was paid late such as ‘belongs to ex-spouse, awarded to ex in divorce proceddings’. this note won’t generally help your score but it will help whoever is looking at your report to understand your circumstances rather then automatically denying you for a loan.

  • Andre

    Depending on the account and the negative information on your credit report, your credit score should increase. Now, if it’s (let’s say) a credit card or loan that’s in good standing, it could hurt your credit report due to inactivity. It’s a double edge sword playing the credit score game :).