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Posts Tagged ‘Credit Cards’

7 Credit Myths Even Smart People Believe

Posted by Ram Kumar Shrestha on June 28, 2012

Ryan McVay / Getty Images


Everybody knows how important it is to maintain good credit, but a lot of people don’t know how. Some think it’s necessary to revolve a credit card balance to get a higher score or don’t know the impact of checking their own credit. Even people who consider themselves financially savvy or who do a fine job managing their own household budgets can be misinformed.

A recent survey revealed some sizable gaps in America’s knowledge when it comes to our credit, and we talked to some credit counseling professionals who shared the most common myths they have to debunk.

Checking your credit information hurts your score. More than a third of Americans think checking their credit report has a negative impact on their score, according to a new survey conducted by credit card comparison site In fact, the reverse is true: While an inquiry from a lender will drop your score by a few points, checking your own report can only help you — it doesn’t ding your score and you might even find a mistake that’s been dragging your score down.

(MORE: 5 States With the Worst Credit Scores)

Getting turned down for a credit card hurts your score. “Although the inquiry will show on your credit report, the decision the issuer makes will not,” says Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling. The inquiry itself is likely to drop your score by a few points, but the lender’s decision doesn’t matter. If you are approved, your score will probably rise, especially if the card has a high credit limit. This is because the availability of untapped credit will improve your credit utilization ratio, which is a significant factor in your credit score. Read the rest of this entry »

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